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HomeMy WebLinkAbout7. Comprehensive Annual Financial Report/Auditor's Report J CITY OF SHAKOPEE Memorandum TO: Mayor and Council Mark McNeill, City Administrator FROM: Gregg Voxland, Finance Director SUBJ: Comprehensive Annual Financial Report/ Auditor's Report DATE: May 26, 2010 Introduction & Background Enclosed are the 2009 Comprehensive Annual Financial Report and the auditor's reports. Steve Wischmann, Partner, in the firm of Kern, DeWenter, Viere, LTD., will be presenting the results. Gre 1 oxland Finance Director H: \Finance \cafr \cafrO9 1 1 1 CITY OF SHAKOPEE 1 Scott County, Minnesota Reports on Government Auditing Standards and Legal Compliance For the Fiscal Year Ended December 31, 2009 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF SHAKOPEE Scott County, Minnesota TABLE OF CONTENTS ' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN 1 ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 1 REPORT ON LEGAL COMPLIANCE 3 SCHEDULE OF FINDING AND RESPONSE ON INTERNAL CONTROL 4 1 1 1 1 1 1 1 1 1 1 1 1 1 1(1) Expert advice. When you need it.' sm ' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS May 24, 2010 1 ' Honorable Mayor and Members of the City Council City of Shakopee Shakopee, Minnesota We have audited the financial statements of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund information of the City of Shakopee, Minnesota, as of and for the year ended December 31, 2009, which collectively comprise the City's basic financial statements and have issued our report thereon dated May 24, 2010. 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. INTERNAL CONTROL OVER FINANCIAL REPORTING 1 In planning and performing our audit, we considered the City's internal control over financial 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 internal control over financial reporting. Accordingly, we do not 1 express an opinion on the effectiveness of the City's internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a 1 material misstatement of the financial statements will not be prevented or detected and corrected on a timely basis. 1 1 1 V Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in the internal control that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses as defined above. However, we identified a certain deficiency in ' internal control over financial reporting, described in the accompanying Schedule of Findings and Responses on Internal Control that we consider to be a significant deficiency in internal control over financial reporting, Audit Finding 06 -01. A significant deficiency is a deficiency, or ' combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. COMPLIANCE AND OTHER MATTERS 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 material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, ' we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. 1 We also noted certain matters that we reported to management of the City in a separate letter dated May 24, 2010. The City's responses to the findings identified in our audit are described in the accompanying Schedule of Finding and Response on Internal Control. We did not 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, 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. 1 -, D W i vim, KERN, DEWENTER, VIERE, LTD. Bloomington, Minnesota 1 1 1 1 2 KOV Expert advice. When you need it.`' REPORT ON LEGAL COMPLIANCE May 24, 2010 Honorable Mayor and Members of the City Council City of Shakopee Shakopee, Minnesota We have audited the financial statements of the governmental activities, the business -type activities, each major fund, the aggregate remaining fund information of the City of Shakopee, Minnesota, as of and for the year ended December 31, 2009, which collectively comprise the City's basic financial statements and have issued our report thereon dated May 24, 2010. ' We conducted our audit in accordance with U.S. generally accepted auditing standards and the provisions of the Minnesota Legal Compliance Audit Guide for Local Government, promulgated by the State Auditor pursuant to Minnesota Statutes Sec. 6.65. Accordingly, the audit included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. 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 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 terms and conditions of applicable legal provisions. This report is intended solely for the information and use of management, the City Council and state regulatory agencies, and is not intended to be and should not be used by anyone other than these specified parties. V sik A „ Dtw 2A>A, UAL c, car i KERN, DEWENTER, VIERE, LTD. Bloomington, Minnesota 1 1 ' 3 1 1 CITY OF SHAKOPEE Scott County, Minnesota 1 SCHEDULE OF FINDING AND RESPONSE ON INTERNAL CONTROL December 31, 2009 CURRENT AND PRIOR YEAR INTERNAL CONTROL FINDING: 1 Significant Deficiency: 1 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 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 significant areas including: cash receipts, cash disbursements and payroll. Areas in which 1 we noticed a lack of segregation are included below. Payroll Although reviewed by the Assistant City Administrator, the Payroll Clerk processes the biweekly payroll, posts payroll to the general ledger, issues direct deposits, prepares the ' payroll taxes, initiates the transfer for payment of payroll, prepares all W -2s and maintains all data files as well as the payroll program. Cash Receipts 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 1 deposits into the general ledger. Deposits at the Recreation Center — One employee is able to receipt money and prepare 1 the bank deposit. Cash Disbursements 1 The Accounting Clerk enters invoices, matches purchase orders to invoices and prepares checks for payment. 1 1 1 1 4 1 CITY OF SHAKOPEE Scott County, Minnesota SCHEDULE OF FINDING AND RESPONSE ON INTERNAL CONTROL December 31, 2009 CURRENT AND PRIOR YEAR INTERNAL CONTROL FINDING: Significant Deficiency: (Continued) 1 Audit Finding 06 -01— Lack of Segregation of Accounting Duties (Continued) City's Response: 1 The small size of the City's accounting staff limits how efficiently the segregation of accounting duties can be accomplished. In order to minimize the risk associated with having a limited accounting staff, the City has the following oversight procedures in place: • The Payroll Supervisor reviews a detailed payroll report each pay period. • The Finance Director takes the deposits for the City Hall and Community Center to ' the bank. • The Finance Director monitors cash reconciliation. • All invoices are approved by an authorized purchaser. 1 • The Finance Director reviews each bill for payment and manually signs each check. 1 1 1 1 1 1 1 1 1 5 1 1 1 1 CITY OF SHAKOPEE 1 Scott County, Minnesota Management Letter 1 For the Fiscal Year Ended December 31, 2009 1 1 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF SHAKOPEE Scott County, Minnesota 1 TABLE OF CONTENTS REPORT ON MATTERS IDENTIFIED AS A RESULT OF THE AUDIT OF THE FINANCIAL STATEMENTS 1 SIGNIFICANT DEFICIENCY 3 DEFICIENCY 4 RECOMMENDATIONS FOR MANAGEMENT 5 REQUIRED COMMUNICATION 7 FINANCIAL ANALYSIS 10 1 1 1 1 1 1 1 1 1 1 1 1 I (DA Expert advice. When you need it.s' REPORT ON MATTERS IDENTIFIED AS A RESULT OF THE AUDIT OF THE FINANCIAL STATEMENTS May 24, 2010 Honorable Mayor and Members ' of the City Council City of Shakopee Shakopee, Minnesota In planning and performing our audit of the financial statements of the City of Shakopee, Minnesota, as of and for the year ended December 31, 2009, in accordance with U.S. generally ' 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 ' purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses and therefore, there can be no assurance that all deficiencies, significant deficiencies or material weaknesses have been identified. Material ' weaknesses and significant deficiencies identified, if any, are stated within this letter. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies in internal control, such that there is a reasonable possibility that a material misstatement of the City's financial statements will not be prevented or detected and corrected on a timely basis. ' A significant deficiency is a deficiency, or combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. 1 1 1 &DV 1 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, 1 2009. The matters discussed herein were considered by us during our audit and they do not modify the opinion expressed in our Independent Auditor's Report dated May 24, 2010, on such statements. This communication is intended solely for the information and use of management, the City Council, others within the City and state oversight agencies and is not intended to be and should 1 not be used by anyone other than these specified parties. pew...04, 649. KERN, DEWENTER, VIERS, LTD. Bloomington, Minnesota 1 1 1 1 1 1 1 1 1 1 1 2 CITY OF SHAKOPEE Scott County, Minnesota 1 SIGNIFICANT DEFICIENCY December 31, 2009 LACK OF SEGREGATION OF ACCOUNTING DUTIES ' Adequate segregation of accounting duties is in place when the four areas of a transaction have been separated: authorization, custody, recording and reconciliation. As part of this year's audit, we reviewed the City's documentation of its internal control over significant areas including: cash receipts, cash disbursements and payroll. Areas in which we noticed a lack of segregation of accounting duties are included below. Payroll Although reviewed by the Assistant City Administrator, the Payroll Clerk processes the biweekly payroll, posts payroll to the general ledger, issues direct deposits, prepares the payroll taxes, initiates the transfer for payment of payroll, prepares all W -2s and maintains all data files as well as the payroll program. 1 Cash Receipts ' Deposits at the City Hall — The front desk personnel receive money, code the revenue and prepare bank deposits. The Senior Accounting Clerk reconciles cash and posts all deposits into the general ledger. 1 Deposits received at the Recreation Center — One employee is able to receipt money, prepare the bank deposits and take the deposits to the bank. Cash Disbursements The Accounting Clerk enters invoices, matches purchase orders to invoices and prepares checks of payment. Management is aware of this condition and has taken certain steps to compensate for the lack of segregation but due to the small staff needed to handle all of the accounting duties, the costs of obtaining desirable segregation of accounting duties often exceeds benefits which could be derived. However, management must remain aware of this situation and should continually monitor the accounting system, including changes that occur. 1 1 1 3 1 CITY OF SHAKOPEE Scott County, Minnesota DEFICIENCY 1 December 31, 2009 IMPROVE ICE ARENA RECEIPTING INTERNAL CONTROL 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 and records funds and also maintains copies of signed ice rental contracts and a list of payers. 1 To improve internal control over the ice arena receipting process and to prevent omissions and errors, we recommend the City implement additional oversight procedures to ensure the accuracy and completeness of ice arena receipts. 1 1 1 1 1 1 1 1 1 1 4 1 1 CITY OF SHAKOPEE Scott County, Minnesota ' RECOMMENDATIONS FOR MANAGEMENT December 31, 2009 GOVERNMENTAL ACCOUNTING THE IMPLICATIONS OF GOVE UN TING STANDARDS BOARD (GASB) STATEMENT NO. 51, ACCOUNTING AND 1 FINANCIAL REPORTING FOR INTANGIBLE ASSETS Governments possess many different types of assets that may be considered intangible assets, ' including easements, land rights, patents, trademarks and computer software. Currently, there is an absence of sufficiently specific authoritative guidance that addresses questions regarding whether and when intangible assets should be considered capital assets for reporting purposes, resulting in inconsistencies in the accounting and financial reporting of intangible assets among state and local governments, particularly in the areas of recognition, initial measurement, and amortization. Governmental Accounting Standards Board (GASB) Statement No. 51 establishes accounting and financial reporting requirements for intangible assets to reduce these inconsistencies, thereby enhancing the cr thcouning an fianal rtie am I and governments ompa comparabili Th Statement of e ac requires t that d n al intang assets ng of not such speci fi ca ong state excluded by its scope provisions be classified as capital assets. ' The Statement identifies an intangible asset as having the following three characteristics: • It lacks physical substance ' • It is nonfinancial in nature • Its useful life extends beyond a single reporting period. The requirements of this Statement are effective for the year ending December 31, 2010. The provisions of this statement generally are required to be applied retroactively. For governments that were classified as phase 1 or phase 2 governments for the purpose of implementing GASB Statement No. 34, retroactive reporting is required for intangible assets acquired in fiscal years ending after June 30, 1980, except for those considered to have indefinite useful lives as of the effective date of this Statement and those that would be considered internally generated. Retroactive reporting of intangible assets by phase 3 governments is encouraged but not required. CONSIDER THE IMPLICATIONS OF GASB STATEMENT NO. 54, FUND BALANCE 1 REPORTING AND GOVERNMENTAL FUND TYPE DEFINITIONS GASB Statement No. 54 was enacted to enhance the usefulness of fund balance information by providing clearer fund balance classifications that can be more consistently applied and by clarifying the existing governmental fund type definitions. The initial distinction that is made in reporting fund balance information is identifying amounts that are considered nonspendable, such as fund balance associated with inventories or prepaid expenses. This Statement also provides for additional classification as restricted, committed, assigned and unassigned based on the relative strength of the constraints that control how specific amounts can be spent. 1 ! 5 1 CITY OF SHAKOPEE 1 Scott County, Minnesota RECOMMENDATIONS FOR MANAGEMENT 1 December 31, 2009 CONSIDER THE IMPLICATIONS OF GASB STATEMENT NO. 54, FUND BALANCE REPORTING AND GOVERNMENTAL FUND TYPE DEFINITIONS The restricted fund balance category includes amounts that can be spent only for the specific 1 purposes stipulated by constitution, external resource providers or through enabling legislation. The committed fund balance classification includes amounts that can be used only for the specific purposes determined by a formal action of the government's highest level of decision - making authority. Amounts in the assigned fund balance classification are intended to be used by the government for specific purposes but do not meet the criteria to be classified as restricted or committed. In governmental funds other than the general fund, assigned fund balance represents the remaining amount that is not restricted or committed, unless that is a negative balance. Unassigned fund balance is the residual classification for the government's general fund and includes all spendable amounts not contained in the other classifications. In other funds, the unassigned classification should be used only to report a deficit balance resulting from overspending for specific purposes for which amounts have been restricted, committed or assigned. 1 Governments are allowed to have stabilization amounts which are formally set aside for use in emergency situations or when revenue shortages or budgetary imbalances arise. These funds must be restricted or committed for a specific purpose and cannot occur routinely. Governments are required to have a fund balance policy which addresses a reasonable minimum 111 level of unrestricted fund balance to be maintained, how the unrestricted fund balance can be used or spent down and how that fund balance will be replenished if it falls below the minimum level. Elimination of the reserved component of fund balance in favor of a restricted classification will enhance the consistency between information reported in the government -wide statements and information in the government fund financial statements and avoid confusion about the relationship between the reserved fund balance and restricted net assets. The Statement is also designed to enhance the usefulness of fund balance information by clarifying the definitions of governmental fund types. For example, special revenue funds are created only to report a revenue source that is restricted or committed to a specified purpose and that revenue source should constitute a substantial portion of the resources reported in the fund. In addition, the definition of the capital project fund type has been clarified to focus on the broader, more consistent understanding of capital outlays and capital activities in today's environment. 1 This Statement is effective for the year ending December 31, 2011; however, early implementation is encouraged. Fund balance reclassifications made to conform to the provisions 1 of this Statement should be applied retroactively by restating fund balance for all prior periods presented. 1 1 6 1 1 CITY OF SHAKOPEE Scott County, Minnesota REQUIRED COMMUNICATION December 31, 2009 We have audited the basic financial statements of the City for the year ended December 31, 2009, and have issued our report dated May 24, 2010. Professional standards require that we provide you with the following information related to our audit. OUR RESPONSIBILITY UNDER U.S. GENERALLY ACCEPTED AUDITING STANDARDS AND GOVERNMENT AUDITING STANDARDS As stated in our engagement letter, our responsibility, as described by professional standards, is to express an opinion about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles. Our audit of the financial statements does not relieve you or management 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 for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. We are 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 identify such matters. 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 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. PLANNED SCOPE AND TIMING OF THE AUDIT We performed the audit according to the planned scope and timing previously communicated to you. 1 QUALITATIVE ASPECTS OF ACCOUNTING PRACTICES Management is responsible for the selection and use of appropriate accounting policies. In 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 were adopted and the application of existing policies was not changed during 2009. We noted no transactions entered into during the year for which there is a lack of authoritative guidance or consensus. There were no significant transactions that have been recognized in the financial statements in a different period than when the transaction occurred. 1 1 7 1 CITY OF SHAKOPEE 1 Scott County, Minnesota REQUIRED COMMUNICATION 1 December 31, 2009 QUALITATIVE ASPECTS OF ACCOUNTING PRACTICES Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were: Depreciation — The City is currently depreciating its capital assets over their estimated useful lives, as determined by management, using the straight -line method. Expense/Expenditure Allocation — The City is currently allocating certain costs among the 1 programs and supporting services benefited. The costs are allocated based on management's estimates. Net Other Post Employment Benefit Obligation — This liability is based on an actuarial study using estimates of future obligations of the City for post employment benefits. We evaluated the key factors and assumptions used to develop the above estimates in 1 determining they are reasonable in relation to the financial statements taken as a whole. The disclosures in the financial statements are neutral, consistent and clear. 1+ DIFFICULTIES ENCOUNTERED IN PERFORMING THE AUDIT We encountered no difficulties in dealing with management in performing and completing our 1 audit. CORRECTED AND UNCORRECTED MISSTATEMENTS Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. There were uncorrected misstatements related to bond issuance costs. Management has determined the effects are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. DISAGREEMENTS WITH MANAGEMENT For purposes of this letter, professional standards define a disagreement with management as a financial accounting, reporting or auditing matter, whether or not resolved to our satisfaction that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. 1 8 1 CITY OF SHAKOPEE Scott County, Minnesota REQUIRED COMMUNICATION December 31, 2009 MANAGEMENT REPRESENTATIONS We requested certain representations from management which were provided to us in the management representation letter. MANAGEMENT CONSULTATIONS WITH OTHER INDEPENDENT ACCOUNTANTS In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the City's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. We are not aware of any consultations by the City's management with other accountants during the course of our audit. OTHER ISSUES We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. OTHER INFORMATION IN DOCUMENTS CONTAINING AUDITED FINANCIAL STATEMENTS 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 reproduced material for our approval before it is distributed. 1 1 1 1 1 9 1 COMPREHENSIVE ANNUAL FINANCIAL REPORT �. . _ Y•'e�� _ '4th: ,. 3 . .� 3 • ^ —� 1 $• i wF y a rt t , f . FOR THE CITY OF SHAKOPEE, MINNESOTA FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009 1 1 1 CITY OF SHAKOPEE, MINNESOTA Scott County 1 COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended December 31, 2009 DEPARTMENT OF FINANCE 1 GREGG M. VOXLAND, Director of Finance 1 1 MEMBER OF GOVERNMENT FINANCE OFFICERS ASSOCIATION OF THE UNITED STATES AND CANADA 129 HOLMES STREET SOUTH SHAKOPEE, MN 55379 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 (THIS PAGE LEFT BLANK INTENTIONALLY) 1 1 1 1 1 1 1 1 1 1 I CITY OF SHAKOPEE Scott County, Minnesota I TABLE OF CONTENTS I SECTION I Page INTRODUCTORY SECTION: I Elected Officials and Administration 1 Organization Chart 2 Letter of Transmittal 3 1 Certificate of Achievement for Excellence in Financial Reporting 7 SECTION II I FINANCIAL SECTION: Independent Auditor's Report 9 1 Management's Discussion and Analysis (Unaudited) 11 Basic Financial Statements: Government -Wide Financial Statements: Statement of Net Assets 24 I Statement of Activities 25 Fund Financial Statements: Balance Sheet — Governmental Funds 26 I Reconciliation of the Balance Sheet to the Statement of Net Assets — Governmental Funds 27 Statement of Revenues, Expenditures and Changes in Fund Balances - I Governmental Funds 28 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities — Governmental Funds 29 I Statement of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual — General Fund 30 Statement of Net Assets — Proprietary Funds 32 I 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 Required Supplementary Information: Schedule of Funding Progress — Other Post Employment Benefits 72 I Supplementary Information: Combining and Individual Fund Financial Statements and Schedules: Combining Balance Sheet — Nonmajor Governmental Funds 74 I Combining Statement of Revenues, Expenditures and Changes in Fund Balances — Nonmajor Governmental Funds 80 Schedule of Revenues, Expenditures and Changes in Fund Balance - I Budget and Actual: Transit Fund 86 Telecommunication Fund 87 I Economic Development Authority Fund 88 Recreation Fund 89 CITY OF SHAKOPEE Scott County, Minnesota TABLE OF CONTENTS ' SECTION II ' Table Page FINANCIAL SECTION: Supplementary Information: (Continued) Combining and Individual Fund Financial Statements and Schedules: (Continued) Combining Statement of Fund Net Assets — Internal Service Funds 90 Combining Statement of Revenues, Expenses and Changes in Fund Net ' Assets — Internal Service Funds 91 Statement of Cash Flows — Internal Service Funds 92 Statement of Changes in Assets and Liabilities — Escrow Agency Fund 93 1 SECTION III STATISTICAL SECTION: 1 Net Assets by Component 1 99 Changes in Net Assets 2 100 Fund Balances — Governmental Funds 3 102 Changes in Fund Balances — Governmental Funds 4 104 Tax Capacity and Estimated Actual Value of Taxable Property 5 106 Direct and Overlapping Property Tax Rates 6 107 Principal Taxpayers 7 108 Property Tax Levies and Collections 8 109 Ratio of Outstanding Debt by Type 9 110 111 Ratio of General Bonded Outstanding 10 111 Direct and Overlapping Governmental Activities Debt 11 113 Legal Debt Margin Information 12 114 1 Pledged Revenue Coverage 13 116 Demographic and Economic Statistics 14 117 Principal Employers 15 119 Full -Time Equivalent City Government Employees by Function/Program 16 120 Operating Indicators by Function/Program 17 122 Capital Asset Statistics by Function/Program 18 124 , i 1 1 1 �. SECTION 1 INTROQUCTOR SECTI 1 1 1 CITY OF SHAKOPEE Scott County, Minnesota ELECTED OFFICIALS AND ADMINISTRATION December 31, 2009 111 Elected Officials Position Term Expires 1 John Schmitt Mayor December 31, 2009 Matthew Lehman Council Member December 31, 2011 Patrick Heitzman Council Member December 31, 2011 1 Steven Clay Council Member December 31, 2009 ' Terry Joos Council Member December 31, 2009 Administration 1 Mark H. McNeill City Administrator Appointed Gregg M. Voxland Finance Director Appointed 1 1 1 1 1 1 1 1 1 1 1 1 1 f . _ S o / \ 1 k | / © 7 d 7 0 « k § [ ! 1 o § ) 2 g ( 1 ' 0 k j § . 'E § 3 o Q ¢ ° = ° ; \ / ) I \ \ ® f 2 I / } ) I iL ji / . s 0 Qo w / 1 2 / ® § 2 / 2 / § �. �At U / / 2 / / . _ _ _ \ \ ( 0 $ 1 �t \ 0 ] e § } 1:- ___ § @ • 7 / m o — { d } ( ) R §. § a _ — z «! « ° 2 — \ b < E . . . = k k f ) _ , \ / ( / E ] ( $. ° ` k e j — c / e + \ 1 o / ( o 5 / ( ] I 2 1 11 1 1 SHAKOPEE May 24, 2010 To the Honorable Mayor, Members of the City Council, and Citizens of the City of Shakopee: 1 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, 1 2009. 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. 1 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, 2009 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, 2009, 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. 1 COMMUNITY PRIDE SINCE 1857 129 Holmes Street South • Shakopee, Minnesota • 55379 -1351 • 952- 233 -9300 • FAX 952- 233 -3801 • www.ci.shakopee.mn . us 3 1 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. In recent years, the City has been 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 2009, 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. 1 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 and budget and staffing. The City Council has four members who serve staggered terms of four years plus the Mayor who serves a two -year term. All council positions are non - partisan, part -time and members are elected at large. The City provides the typical 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 a ten- year 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. 1 Local Economy. Compared to the majority of national markets, the City has had a relatively stable economic environment, and there has been some rebound in the housing market. While still down significantly from the peak development years, the number of building permits that have been issued by the City are up in 2009 over 2008. Housing had grown rapidly following the opening of the new Highway 169 bridge over the Minnesota River in 1995. Overall, the slowdown in the housing industry over the past three years has impacted the city. 1 4 1 1 1 However, the local commercial industrial sector seems to have been spared major contraction up to this point. The City has traditionally had a strong industrial base with commercial /industrial property currently ' comprising 19% of market value and 34% of tax capacity. The largest commercial /industrial taxpayer comprises 1.1% of total tax capacity, which indicates the diversity of the local tax base. Companies in the City manufacture chemicals, malt, roofing products, glass, cardboard and electronics with electronics being the rapidly growing industry in recent years. The tax base decreased 5% for taxes payable in 2009, after having increased 11% for taxes payable in ' 2008. Tax capacity decrease for taxes payable in 2010 is around 5 per cent. Long -term Financial Planning. About every year, the City issues bonds to fund infrastructure replacement, 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). One replacement and one additional satellite fire station are •anticipated to be built over 1 the next one to five years. The Shakopee Public Utilities Commission constructed a new service center in 2004. Starting with the 2010 budget cycle, staff prepared a two year operating budget but the Council actually adopts only the next year, not both years at once. The City of Shakopee annually prepares an updated five -year capital improvement plan and ten year capital equipment list. Relevant Financial Policies The City has a fund balance policy for the General Fund of having 40% to 45% of the next year's budget ' in unreserved fund balance. This is needed for cash flow and potential revenue shortages. The City typically receives no local government aid or market value homestead credit from the State of ' Minnesota. The major source of revenue for the General Fund is property taxes which are received one half in June and one half in December. The accounting, auditing and financial reporting policies are designed to maintain a system of financial monitoring, control and reporting for all operations and funds in order to provide effective means of ensuring that overall City goals and objectives will be met and to assure the City's residents and investors that the City is well managed and fiscally sound. The investment policy provides for conservative investing, preserving capital and maintaining adequate 1 liquidity for forecasted cash needs. A third party investment manager handles the majority of the portfolio and all investments are held in a trust account. The debt policy ensures that the City's debt 1) does not weaken the City's financial structure; and 2) provide limits on debt to avoid problems in servicing debt. This policy is critical for maintaining the best possible credit rating. 1 Capital policies include having expenditures forecast ahead for five to ten years and are updated annually. Internal Service Funds for major equipment, major buildings and park asset replacement stabilize the annual cost of those items to the General fund. 1 5 1 Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Shakopee for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended December 31, 2008. This was the twenty fifth 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. 1 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. 1 Respectfully submitted, 1 Signed: lv` t "tc-- bea Signed: 0) Title: C ITS 4QM / / 0( STT AroA Title: 0 /kJ "- A6;773''..- 1 1 1 1 1 1 1 6 1 1 Certificate of 1 Achievement for Excellence 1 in Financial 1 Reporting Presented to City of Shakopee 1 Minnesota For its Comprehensive Annual Financial Report 1 for the Fiscal Year Ended December 31, 2008 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government 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 1 standards in government accounting and financial reporting. ea ON t tows President 1 ofee-AgY Executive Director 1 1 7 1 1 1 1 1 1 1 1 1 1 (THIS PAGE LEFT BLANK INTENTIONALLY) 1 1 1 1 1 1 1 1 1 8 1 1 r 1 1 1 SECTION II ' FI NANCIAL SECTION 1 r r 1 1 r r r • r r i i K1DV Expert advice. When you need it.s" I INDEPENDENT AUDITOR'S REPORT I 1 May 24 2010 1 Honorable Mayor and Members I of the City Council City of Shakopee Shakopee, Minnesota I We have audited the accompanying financial statements of the governmental activities, the I business -type activities, each major fund and the aggregate remaining fund information of the City of Shakopee, Minnesota, as of and for the year ended December 31, 2009, 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 I to express opinions on these financial statements based on our audit. We conducted our audit in accordance with U.S. generally accepted auditing standards and the I standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of I 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 I the overall financial statement presentation. We believe our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the activities, each major fund and the aggregate remaining fund information of the City of Shakopee, Minnesota, as of December 31, 2009, and the respective changes in financial position and cash flows, where I 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. 1 Expert advice. s When you need it. St. Cloud Twin Cities www.kd�.com 220 Park Avenue S. 3800 American Boulevard W. Toll Free Certified Public Accountants P.O. Box 1304 Suite 1000 877.912.7696 I Wealth Management St. Cloud, Minnesota Bloomington, Minnesota Payroll Services 56302 55431 T Help Desk Business Valuations Phone: 320.251.7010 Phone: 952.563.6800 566.400.6426 Technology Services Fax: 320.251.1784 Fax: 952.563.6801 9 i In accordance with Government Auditing Standards, we have also issued our report dated May 24, 2010, 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 compliance and the results of that testing and not to provide an opinion on the internal control over financial reporting or on compliance. That 1 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 and Schedule of Funding Progress — Other Post Employment Benefits, as listed in the Table of Contents, are not a required part of the basic financial statements but are 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 performed 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 Financial Statements and Schedules are presented for purposes of additional analysis and are 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. 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. ( KERN, DEWENTER, VIERE, LTD. Bloomington, Minnesota 1 1 1 1 10 CITY OF SHAKOPEE Scott County, Minnesota MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2009 As management of the City of Shakopee (the "City "), we offer readers of the City's financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2009. 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 $ 331 million (net assets). Of this amount, $ 84 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 $ 7.8 million. • As of the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of $ 28 million, the same as the prior year. Approximately 73% of this total amount, $ 21 million is available for spending at the City's discretion (unreserved fund balance). • At the end of the current fiscal year, unreserved fund balance for the General Fund was $ 10.7 million or 67% of total General Fund expenditures. • The City's total bonded debt decreased by $ 13.7 million (24 %) 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) government - wide financial statements, 2) fund financial statements and 3) Notes to the Financial Statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government - Wide Financial Statements 1 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 1 CITY OF SHAKOPEE 1 Scott County, Minnesota MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2009 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. The 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. 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. 1 Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have 1 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 1 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 City's near -term financing's requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar 1 information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long -term impact of the City's near -term financing decisions. The Governmental Funds Balance Sheet and the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. 1 1 12 1 1 CITY OF SHAKOPEE Scott County, Minnesota I MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2009 1 The City maintains 32 individual governmental funds. Information is presented separately in the Governmental Funds Balance Sheet and in the Governmental Funds Statement of Revenues, I Expenditures and Changes in Fund Balances for the General Fund and 2004A Improvement Bonds Debt Service Fund. These are considered to be major funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data 1 for each of these non -major governmental funds is provided in the form of combining statements elsewhere in this report. The City adopts an annual appropriated budget for its General Fund and four of its special I revenue funds. A budgetary comparison statement has been prepared for those funds to demonstrate compliance with the budget. 1 The basic governmental funds financial statements can be found on pages 26 to 31 of this report. Proprietary Funds 1 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 I drainage operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City's various functions. The City uses internal service funds to account for its fleet of vehicles and mobile equipment, its major buildings, the replacement of I park assets and for employee compensated absences and other post employment benefits. All of these services predominantly benefit governmental rather than business -type functions. I 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 drainage operations, all of which are considered to be major I 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. 1 The basic proprietary fund financial statements can be found on pages 32 to 35 of this report. Fiduciary Funds I 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 1 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. 1 1 13 i 1 CITY OF SHAKOPEE 1 Scott County, Minnesota MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2009 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 70 of this report. Other Information 1 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 1 obligation to provide pension benefits to its employees. The combining statements referred to earlier in connection with non -major 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 74 to 93 of this report. 1 GOVERNMENT - WIDE FINANCIAL ANALYSIS As noted earlier, net assets may serve over time as a useful indicator of a City's financial 1 position. For the City, assets exceeded liabilities by $ 331 million at the close of the most recent fiscal year. By far the largest portion of the City's net assets (68 %) reflects its investment in capital assets (e.g., land, buildings and equipment); less any related debt used to acquire those assets that is still outstanding. The City used these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. 1 1 1 1 1 14 1 1 CITY OF SHAKOPEE Scott County, Minnesota 1 MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2009 1 Net Assets Governmental Acvtivities Business -Type Activities Total 2009 2008 2009 2008 2009 2008 Current and Other Assets $ 49,252 $ 47,489 $ 65,201 $ 68,876 $ 114,453 $ 116,365 Capital Assets 133,052 136,525 134,295 135,220 267,347 271,745 I Total Assets $ 182,304 $ 184,014 $ 199,496 $ 204,096 $ 381,800 $ 388,110 Long -Term Liabilities I Outstanding $ 19,273 $ 21,912 $ 20,360 $ 31,622 $ 39,633 $ 53,534 Other Liabilities 5,583 5,189 5,634 6,227 11,217 11,416 Total Liabilities $ 24,856 $ 27,101 $ 25,994 $ 37,849 $ 50,850 $ 64,950 1 NET ASSETS: Invested in Capital Assets, Net of Related Debt $ 112,097 $ 112,910 $ 114,331 $ 115,124 $ 226,428 $ 228,034 1 Restricted 16,519 21,916 3,575 1,756 20,094 23,672 Unrestricted 28,833 22,087 55,595 49,367 84,428 71,454 Total Net Assets $ 157,449 $ 156,913 $ 173,501 $ 166,247 $ 330,950 $ 323,160 An additional portion of the City's net assets (6 %) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets I ($ 84 million) may be used to meet the City's ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City was able to report positive balances in all three 1 categories of net assets, both for the government as a whole, as well as for its separate governmental and business -type activities. The same situation held true for the prior fiscal year. During the current fiscal year, the City's net assets increased by $ 7.8 million. 93% of this I increase is due to enterprise fund activities reflecting increased operating income and a prior period adjustment of $ 1.3 million. 1 1 1 1 1 15 i 1 CITY OF SHAKOPEE 1 Scott County, Minnesota MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2009 Changes in Net Assets 1 Governmental Acvtivities Business -Type Activities Total 2009 2008 2009 2008 2009 2008 REVENUES: Program Revenues: Charges for Services $ 4,714 $ 5,763 $ 42,769 $ 46,059 $ 47,483 $ 51,822 Operating Grants and Contributions 1,485 1,660 - - 1,485 1,660 Capital Grants and Contributions 1,242 1,825 1,879 1,007 3,121 2,832 General Revenues: Property Taxes 14,676 14,201 - - 14,676 14,201 Other Taxes 152 389 - - 152 389 Other 1,360 1,998 1,337 3,129 2,697 5,127 Total Revenues 23,629 25,836 45,985 50,195 69,614 76,031 EXPENSES: Gemeral Government 3,388 3,514 - - 3,388 3,514 Public Safety 8,528 8,346 - - 8,528 8,346 Public Works 7,860 8,099 - - 7,860 8,099 Economic Development 317 522 - - 317 522 Culture and Recreation 3,860 3,638 - - 3,860 3,638 Interest on Long -Term Debt 1,040 1,034 - - 1,040 1,034 Electric - - 30,141 36,187 30,141 36,187 Water - - 3,316 3,461 3,316 3,461 I Sewer - - 3,398 3,309 3,398 3,309 Storm - - 1,264 1,435 1,264 1,435 Total Expenses 24,993 25,153 38,119 44,392 63,112 69,545 Increase (Decrease in Net Assets before Transfers (1,364) 683 7,866 5,803 6,502 6,486 Transfers 1,900 1,298 (1,900) (1,298) - - Change in Net Assets 536 1,981 5,966 4,505 6,502 6,486 NET ASSETS: January 1 156,913 154,932 166,247 161,742 323,160 316,674 Prior Period Adjustment - - 1,288 - 1,288 - January 1, As Restated 156,913 154,932 167,535 161,742 324,448 316,674 December3l $ 157,449 $ 156,913 $ 173,501 $ 166,247 $ 330,950 $ 323,160 1 1 1 1 16 1 1 CITY OF SHAKOPEE Scott County, Minnesota MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2009 FINANCIAL ANALYSIS OF THE CITY'S FUNDS As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. 1 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 $ 28,323, an increase of $ 67 in comparison with the prior year. Approximately 73% ($ 20,661) of the total amount of $ 28,323 constitutes unreserved fund balance, which is available for spending at the City's discretion. The remainder of fund balance ($ 7,662) 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 an increase of $ 341 but has a 1 negative fund balance of $ 1,268. 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 $ 11,502. 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 67% of total General Fund expenditures. 1 Fund balance of the City's General Fund increased by $ 1,643 during the current fiscal year. This was in part due to conservative budgeting. Key factors in this change are as follows: • Revenues exceeded the budget by $ 601. Tax collections and building permit revenues exceeded expectations. • Under - spending the budget by $ 934 or 5.5 %. City staff continued to be conservative in spending plus there were vacant staff positions. The 2004A Improvement Bonds debt service fund had similar financial activity as 2008 but due to the overall decrease in activity, it became a major fund. 1 1 1 1 19 1 CITY OF SHAKOPEE I Scott County, Minnesota MANAGEMENT'S DISCUSSION AND ANALYSIS 1 December 31, 2009 Proprietary funds I The City's proprietary funds provide the same type of information found in the government -wide 1 financial statements, but in more detail. Unrestricted net assets of the enterprise funds: 1 Il_ Electric Water Sewer Storm Beginning of Year $ 16,362 $ 2,081 $ 15,411 $ 15,512 Change During Year 3,706 621 891 1,012 End of Year $ 20,068 $ 2,702 $ 16,302 $ 16,524 GENERAL FUND BUDGETARY HIGHLIGHTS 1 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 $ 17,355 and transfers out were $ 1,236. Final budget for expenditures was $ 16,965 and transfers out were $ 1,653. Original adopted budget for revenues was $ 16,465 and the final amended was $ 16,474. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets 1 The City's investment in capital assets for its governmental and business type activities as of December 31, 2009, amounts to $ 226,428 (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 were virtually unchanged from the previous year. Major capital assets events during the current fiscal year included the following: • A variety of street construction projects were completed with a value of $ 1,309. 1 • Buildings added $ 91. • Equipment added $ 989. • Change in net utility assets for electric $ (587), water $ 286, sewer $ (286) and storm 1 $ (338). 1 1 20 1 1 1 CITY OF SHAKOPEE Scott County, Minnesota I MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2009 I Capital Assets (Net of Depreciation) I Governmental Activities Business -Type Activities Total 2009 2008 2009 2008 2009 2008 1 Land $ 19,469 $ 19,272 $ 8,521 $ 9,128 $ 27,990 $ 28,400 Construction in Progress 147 - 553 1 700 1 I Buildings and System: Improvements Other than Buildings 25,869 26,668 123,714 124,611 149,583 151,279 Infrastructure 79,538 82,432 - - 79,538 82,432 Machinery and Equipment 8,029 8,153 1,507 1,480 9,536 9,633 I Total $ 133,052 $ 136,525 $ 134,295 $ 135,220 $ 267,347 $ 271,745 I Additional information on the City's capital assets can be found in Note 5 on pages 54 to 56 of this report. 1 Long - Term Debt At the end of the current fiscal year, the City had total bonded debt outstanding of $ 43,190. Of I this amount, $ 6,755 comprises debt backed by the full faith and credit of the government and $ 14,200 is special assessment debt for which the government is liable in the event of default by the property owners subject to the assessment. The remainder of the City's debt represented I bonds secured solely of specified revenue sources (i.e., revenue bonds). Outstanding Debt G.O. and Revenue Bonds I Governmental Activities Business -Type Activities Total 2009 2008 2009 2008 2009 2008 I G.O. Bonds $ 6,755 $ 7,165 $ - $ - $ 6,755 $ 7,165 Special Assessment Debt 1 with Governmental Commitment 14,200 16,450 - - 14,200 16,450 Revenue Bonds - - 22,235 33,225 22,235 33,225 1 Total $ 20,955 $ 23,615 $ 22,235 $ 33,225 $ 43,190 $ 56,840 The City's total bonded debt decreased by $ 13,650 during the current fiscal year. I Minnesota Statutes limit the amount of general obligation (G.O.) debt a government entity may issue to a net figure of 3% of the taxable market value. The current debt limitation for the City is 1 $ 116 million, which is significantly in excess of the City's outstanding G.O. debt. 21 i 1 CITY OF SHAKOPEE Scott County, Minnesota MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2009 Additional information on the City's long -term debt can be found in Note 6 on pages 56 to 59 of this report. ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES The unemployment rate for the City was 6.8% at year -end. This is an increase from a rate of 6.7% a year ago. The state's average unemployment rate was 7.3% and the national average rate was 9.7 %. Inflationary trends in the region compare favorably to national indices. During the current fiscal year, unreserved fund balance in the General Fund increased from $ 8,734 to $ 10,703. The City has appropriated $ 83 of this amount for spending in the 2010 fiscal year. General Fund revenues from development activities such as permits, engineering fees and platting were $ 476, which is 2.8% of total revenues. For 2008, the amounts were $ 932, or 5.8 %. 1 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 2007 through 2009. The City has reserved part of the fund balance for building inspection related activities. The slower housing market is expected to continue through 2010 and into 2011. The tax levy for 2009/10 decreased from $ 14,984 to $ 14,919, a decrease of 0.4 %. The tax rate increased from 32.6300 to 33.7099, a 3.3% increase. The General Fund budget for 2010 expenditures as originally adopted was $ 19,768 compared to $ 17,355 for 2009 and $ 17,049 for 2008. The increase for 2010 reflects the merger of the Recreation and Telecommunications Special Revenue Funds into the General Fund. In 2009, there were 40 lots /units in 2 final plats made available for building. The respective 1 numbers for the prior year were zero and 2. Utility rates for the Electric and Water enterprise funds were slightly increased from 2009 while 1 the Sewer Fund flow rate increased 16% with the flat fee decreasing 7% and the Storm Drainage Fund rate was decreased 8 %. REQUESTS FOR INFORMATION This financial report is designed to provide a general view of the City's finances for all those with an interest in the City's finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Finance Director, 129 Holmes St. S., Shakopee, Minnesota, 55379. 1 22 1 1 1 1 1 1 1 1 1 1 BASIC FINANCIAL STATEMENTS 1 1 1 1 1 1 1 1 23 1 CITY OF SHAKOPEE Scott County, Minnesota I STATEMENT OF NET ASSETS December 31, 2009 Governmental Business -Type 1 Activities Activities Total ASSETS: Cash and Investments 1 (Including Cash Equivalents) $ 41,551,101 $ 52,600,111 $ 94,151,212 Restricted and Other Accounts - 5,134,094 5,134,094 Property Tax Receivable 319,740 - 319,740 1 Accounts Receivable (Net of Allowance for Uncollectible Accounts) 600,416 3,421,618 4,022,034 Interest Receivable 274,513 354,197 628,710 Notes Receivable 596,873 - 596,873 Special Assessments Receivable 7,339,798 178,416 7,518,214 1 Due from Other Funds (Internal Balances) (47, 175) 47,175 - Advances to Other Funds (Internal Balances) (1,505,000) 1,505,000 - Inventories - 763,798 763,798 Prepaid Expenses 121,983 82,823 204,806 1 Unamortized Debt Issue Costs - 592,836 592,836 Electric Plant Acquisition (Net of Accumulated Amortization) - 520,536 520,536 Capital Assets not being Depreciated: Land 19,469,140 8,521,029 27,990,169 Construction in Progress 146,702 553,590 700,292 1 Capital Assets being Depreciated: Infrastructure 127,752,351 - 127,752,351 Plant in Service - 160,855,967 160,855,967 1 Buildings 33,592,118 - 33,592,118 Machinery and Equipment 13,192,061 2,448,695 15,640,756 Less Accumulated Depreciation (61,100,224) (38,084,076) (99,184,300) Total Assets $ 182,304,397 $ 199,495,809 $ 381,800,206 LIABILITIES AND NET ASSETS: Liabilities: Accounts Payable $ 987,513 $ 3,266,395 $ 4,253,908 Contracts Payable 24,212 - 24,212 Due to Other Governments 116,963 - 116,963 Salaries and Benefits Payable 451,084 - 451,084 Deposits Payable - 1,063,047 1,063,047 I Interest Payable 337,832 394,535 732,367 Unearned Revenue - 70,047 70,047 Customer Advances - 51,688 51,688 Bond Principal Payable, Net: Payable Within One Year 2,930,000 765,000 3,695,000 1 Payable After One Year 18,025,000 20,312,361 38,337,361 Compensated Absences Payable: Payable Within One Year 735,000 23,706 758,706 Payable After One Year 827,320 32,408 859,728 I Net OPEB Obligation: Payable After One Year 420,884 15,200 436,084 Total Liabilities 24,855,808 25,994,387 50,850,195 Net Assets: 1 Invested in Capital Assets, Net of Related Debt 112,097,148 114,331,216 226,428,364 Restricted for: Economic Development 811,781 - 811,781 1 Cable PEG Fees 52,442 - 52,442 Transit 1,707,097 - 1,707,097 Forfeiture 107,791 - 107,791 Debt Service 13,839,754 593,751 14,433,505 1 Capital Improvements - 2,980,861 2,980,861 Unrestricted 28,832,576 55,595,594 84,428,170 Total Net Assets 157,448,589 173,501,422 330,950,011 Total Liabilities and Net Assets $ 182,304,397 $ 199,495,809 $ 381,800,206 1 The Notes to the Financial Statements are an integral part of this statement. 24 . 1 �i M N v M 1 O n 10 0o 10 O\ N ' V1 01 N V1 N .•-- tr — un — '- M N N IN 'ct N •-+ 0 co N \0 tr.) 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' �t ' 0 > D g , O 1p M O ,-. .� • x 4 U a M— 00 00 d a, 0 sr 4T., A w O p O ' H r o� z w F t es N M 1 er 1 0 Os 00 N 0 ON ON C rw 0 w 00 t■ N v t 01 O1 00 10 M 0 N I V 0 F ',+ cQ en 10 l� ,� O l0 0 v 00 I/1 0 l� ; B Q y U cL) 00 N . M N 0 0 0 if) O \ N W C N bbl) 10 10 M O t-- N 1 0 0 - - > CYi s ti c4 I 69 EA 4 > w t5 4 • C a a) i d y O aa)i ea C w C E . p ti . 1 NON. 1MD y 4 U ¢ 6:41 � � ❑ •o rn oo M � `.� U CQ Q fY1 W y N Oh10 OO N. M p , en 00 00 O 10 01 O M O 10 00 01 N Q vii C z '0 .G ,. - . Vl .1 01 01 10 .E .-+ o . a) = y +� •O To W 0 oo N 10 . En U en u w 00 M 00 O a n '-+ M M N •-•� .. O U y y w 0 W eh 00 t•-•:' M .--� N O M M .-+ M N Or F CJ email � d a Q Q � ��' us a+ O i.. Q. 69 69 0 f vZ: z 0 I o ed a) I 9 0' eu o Y a) . .Y ¢ ¢ C N - I co U en t O D U ii) v 0 e cet O .y o co E" g o 0 a) 0 Q A b C7 Q o CQ o o • a 1. . o o o isH l• B AH z i ro 3 g �c7ao.wc�� 0w3vnv� 0 En 25 1 CITY OF SHAKOPEE Scott County, Minnesota 1 BALANCE SHEET - GOVERNMENTAL FUNDS December 31, 2009 Debt Service 2004A Other Total I Improvement Governmental Governmental General Fund Bonds Funds Funds ASSETS: Cash and Investments $ 11,165,966 $ 747,224 $ 18,222,764 $ 30,135,954 I Taxes Receivable - Delinquent 312,696 - 7,044 319,740 Special Assessments Receivable: Delinquent 4,120 - 41,278 45,398 I Deferred 23,657 2,302,359 4,968,384 7,294,400 Accounts Receivable 536,437 - 63,979 600,416 Interest Receivable 70,674 5,111 126,176 201,961 Due from Other Funds 668,932 - - 668,932 Notes Receivable - - 151,873 151,873 Prepaid Items 121,983 - - 121,983 I Total Assets $ 12,904,465 $ 3,054,694 $ 23,581,498 $ 39,540,657 LIABILITIES AND FUND BALANCES: I Liabilities: Accounts Payable $ 494,521 $ 274 $ 250,176 $ 744,971 Contracts Payable - - 24,212 24,212 I Due to Other Funds 116,107 - 600,000 716,107 Advances from Other Funds - - 1,505,000 1,505,000 Due to Other Governments - - 116,963 116,963 I Salaries and Benefits Payable 451,084 - - 451,084 Deferred Revenue 340,473 2,302,359 5,016,706 7,659,538 Total Liabilities 1,402,185 2,302,633 7,513,057 11,217,875 Fund Balances: Reserved for: Special Revenue - - 2,677,290 2,677,290 I Capital Projects - - 4,185,059 4,185,059 Prepaid Items 121,983 - - 121,983 Building Permits and Activities 677,293 - - 677,293 I Unreserved, Reported in: General Fund - Undesignated 10,703,004 - - 10,703,004 Special Revenue - Undesignated - - - - Debt Service - Undesignated - 752,061 6,752,709 7,504,770 I Capital Projects - Undesignated - - 2,453,383 2,453,383 Total Fund Balances 11,502,280 752,061 16,068,441 28,322,782 Total Liabilities and Fund Balances $ 12,904,465 $ 3,054,694 $ 23,581,498 $ 39,540,657 1 1 The Notes to the Financial Statements are an integral part of this statement. 26 1 1 CITY OF SHAKOPEE ' Scott County, Minnesota RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET ASSETS - GOVERNMENTAL FUNDS December 31, 2009 Total Fund Balances - Governmental Funds $ 28,322,782 1 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 146,471,645 Less Accumulated Depreciation (48,891,735) ' 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 (20,955,000) Delinquent property taxes and assessments receivable will be collected this year, but are not available soon enough to pay for the current period's expenditures and, therefore, are deferred in the funds. ' Property Taxes 319,740 Special Assessments 45,398 ' Deferred special assessments receivable are not available to pay for current expenditures and, therefore, are deferred in the funds. Deferred Special Assessments 7,294,400 ' Governmental funds do not report a liability for accrued interest due and payable. (337,832) Internal service funds are used by management to charge the costs of equipment, buildings, park assets and employee benefits to individual funds. A portion of the assets and liabilities of those funds are included in governmental activities in the Statement of Net Assets. 45,179,191 Total Net Assets - Governmental Activities $ 157,448,589 1 The Notes to the Financial Statements are an integral part of this statement. 27 1 CITY OF SHAKOPEE Scott County, Minnesota 1 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS For the Year Ended December 31, 2009 Debt Service 1 2004A Other Total Improvement Governmental Governmental I General Fund Bonds Funds Funds REVENUES: Property Taxes $ 13,758,020 $ - $ 1,082,075 $ 14,840,095 ' Tax Increments - - 151,956 151,956 Special Assessments 14,899 288,676 1,506,936 1,810,511 Licenses and Permits 1,122,619 - 370,127 1,492,746 i Intergovernmental 593,647 - 1,218,021 1,811,668 Charges for Services 804,536 - 1,004,329 1,808,865 Fines and Forfeitures 364,895 - 63,767 428,662 Miscellaneous 416,023 16,873 1,070,826 1,503,722 Total Revenues 17,074,639 305,549 6,468,037 23,848,225 EXPENDITURES: I Current: General Government 3,145,990 - 185,203 3,331,193 Public Safety 8,516,140 - 88,564 8,604,704 1 Public Works 2,477,591 - 1,113,458 3,591,049 Culture and Recreation 1,733,168 - 2,165,676 3,898,844 Economic Development 75,306 - 241,260 316,566 111 Debt Service: Principal - 480,000 2,180,000 2,660,000 Interest and Other Charges - 194,669 882,656 1,077,325 Capital Outlay 82,496 - 1,714,803 1,797,299 Total Expenditures 16,030,691 674,669 8,571,620 25,276,980 Excess of Revenues Over 1 (Under) Expenditures 1,043,948 (369,120) (2,103,583) (1,428,755) OTHER FINANCING SOURCES (USES): 1 Transfers In 2,248,302 - 2,709,831 4,958,133 Transfers Out (1,649,572) - (1,812,528) (3,462,100) Total Other Financing Sources (Uses) 598,730 - 897,303 1,496,033 I Net Change in Fund Balances 1,642,678 (369,120) (1,206,280) 67,278 FUND BALANCES: 1 Beginning of Year 9,859,602 1,121,181 17,274,721 28,255,504 End of Year $ 11,502,280 $ 752,061 $ 16,068,441 $ 28,322,782 1 The Notes to the Financial Statements are an integral part art of this statement. 28 I 1 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, 2009 Net Change in Fund Balances - Governmental Funds $ 67,278 Amounts reported for governmental activities in the Statement of Activities are 1 different because: Capital outlays are reported in governmental funds as expenditures. However, 1 in the Statement of Activities, the cost of those assets is allocated over the estimated useful lives as depreciation expense. Capital Outlays 1,332,221 1 Depreciation Expense (4,273,338) Loss on Disposal of Fixed Assets (6,032) Contributed Assets 440,577 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. 2,660,000 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 1 the interest accrues, regardless of when it is due. 37,281 Certain revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. Special Assessments (936,471) 1 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. (163,577) Internal service funds are used management by ma agement to charge the costs of certain activities such as buildings, equipment, park assets and employee benefits to individual funds. This amount represents the change in net assets of the internal service funds, which all is reported with governmental activities. 1,378,141 1 Change in Net Assets - Governmental Activities $ 536,080 1 The Notes to the Financial Statements are an integral part of this statement. 29 1 1 CITY OF SHAKOPEE Scott County, Minnesota 1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - GENERAL FUND For the Year Ended December 31, 2009 Budgeted Amounts Variance with 1 Actual Final Budget - Original Final Amounts Over (Under) REVENUES: 1 Property Taxes: General Property Taxes $ 11,735,150 $ 11,735,150 $ 12,249,032 $ 513,882 Fiscal Disparities 1,344,160 1,344,160 1,329,736 (14,424) 1 Lodging Tax 210,000 210,000 170,009 (39,991) Tax Increments - - 298 298 Aggregate Tax 8,000 8,000 8,945 945 Total Property Taxes 13,297,310 13,297,310 13,758,020 460,710 1 Special Assessments 2,000 2,000 14,899 12,899 Licenses and Permits 683,300 683,300 1,122,619 439,319 Intergovernmental Revenues: I Federal Grants 5,000 5,000 1,975 (3,025) PERA Aid 19,000 19,000 11,933 (7,067) Police Aid 295,000 295,000 298,739 3,739 Other Grants and Aids 315,000 258,990 281,000 22,010 I Total Intergovernmental Revenues 634,000 577,990 593,647 15,657 Charges for Services: General Government 78,900 78,900 84,729 5,829 Public Safety 308,700 373,700 367,588 (6,112) Public Works 499,000 499,000 352,219 (146,781) 1 Total Charges for Services 886,600 951,600 804,536 (147,064) Fines and Forfeitures 510,000 510,000 364,895 (145,105) Miscellaneous Revenues: 1 Investment Income 400,000 400,000 330,247 (69,753) Other 51,300 51,300 85,776 34,476 I Total Miscellaneous Revenues 451,300 451,300 416,023 (35,277) Total Revenues 16,464,510 16,473,500 17,074,639 601,139 EXPENDITURES: I General Government: Mayor and Council 165,700 165,700 123,440 (42,260) Administration 553,930 553,930 570,111 16,181 I City Clerk 310,200 310,200 290,215 (19,985) Finance 819,090 819,090 762,860 (56,230) Legal 533,500 473,500 422,045 (51,455) I Planning 505,820 513,820 474,594 (39,226) Government Buildings 236,250 236,250 214,259 (21,991) Information Technology 359,170 351,170 341,934 (9,236) Total General Government 3,483,660 3,423,660 3,199,458 (224,202) 1 The Notes to the Financial Statements are an integral part of this statement. 30 1 1 CITY OF SHAKOPEE 1 Scott County, Minnesota SCHEDULE OF REVENUES, EXPENDITURES AND I CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - GENERAL FUND For the Year Ended December 31, 2009 (Continued) Budgeted Amounts Variance with I Actual Final Budget - mounts Over (Under) EXPENDITURES: I Public Safety: Police $ 6,257,710 $ 6,199,710 $ 5,952,791 $ (246,919) Fire 1,986,480 1,974,480 1,809,932 (164,548) 1 Building Inspection 749,130 745,130 769,883 24,753 Total Public Safety 8,993,320 8,919,320 8,532,606 (386,714) Public Works: I Streets and Highways: Engineering 758,300 685,300 551,152 (134,148) Streets 1,901,010 1,805,520 1,842,126 36,606 1 Shop 103,640 97,140 90,751 (6,389) Total Public Works 2,762,950 2,587,960 2,484,029 (103,931) Park and Recreation: 1 Park Maintenance 1,506,000 1,495,000 1,414,352 (80,648) Natural Resources 135,820 65,820 40,458 (25,362) Library/Congregate Dining 323,380 323,380 284,482 (38,898) 1 Total Park and Recreation 1,965,200 1,884,200 1,739,292 (144,908) Economic Development 150,000 150,000 75,306 (74,694) 1 Total Expenditures 17,355,130 16,965,140 16,030,691 (934,449) Excess of Revenues Over I (Under) Expenditures (890,620) (491,640) 1,043,948 1,535,588 OTHER FINANCING SOURCES (USES): Transfers In 2,019,900 2,119,900 2,248,302 128,402 1 Transfers Out (1,236,160) (1,653,104) (1,649,572) 3,532 Total Other Financing Sources (Uses) 783,740 466,796 598,730 131,934 I Net Change in Fund Balances $ (106,880) $ (24,844) 1,642,678 $ 1,667,522 FUND BALANCES: I Beginning of Year 9,859,602 End of Year $ 11,502,280 1 1 The Notes to the Financial Statements are an integral part of this statement. 31 1 1 CITY OF SHAKOPEE Scott County, Minnesota I STATEMENT OF NET ASSETS - PROPRIETARY FUNDS December 31, 2009 Business -Type Activities - Enterprise Funds Governmental ' Activities - Storm Internal I Electric Water Sewer Drainage Total Service Funds ASSETS: Current Assets: Cash and Cash Equivalents $ 12,245,195 $ 2,598,691 $ 1,181,481 $ 1,345,743 $ 17,371,110 $ 2,075,357 Investments 7,165,190 169,271 13,040,736 14,853,804 35,229,001 9,339,790 Restricted Accounts 906,459 81,827 - - 988,286 - Accounts Receivable 2,559,197 283,464 403,424 246,045 3,492,130 - Allowance for Uncollectible Accounts (57,324) (13,188) - - (70,512) - Interest Receivable 98,455 34,592 102,108 119,042 354,197 72,552 Special Assessment Receivable, Current - - 25,419 - 25,419 - Notes Receivable, Current - - - - - 80,000 Due from Other Funds 166,172 18,699 - - 184,871 - Advances to Other Funds, Current - - 155,000 - 155,000 - Inventories 731,682 32,116 - - 763,798 - ' Prepaid Expenses 62,117 20,706 - - 82,823 - Total Current Assets 23,877,143 3,226,178 14,908,168 16,564,634 58,576,123 11,567,699 Noncurrent Assets: Restricted Accounts 1,061,147 2,984,661 - - 4,045,808 - I Other Accounts 100,000 - - - 100,000 - Special Assessment Receivable, Noncurrent - - 152,997 - 152,997 - Notes Receivable, Noncurrent - - - - - 365,000 Advances to Other Funds, Noncurrent - - 1,350,000 - 1,350,000 - Unamortized Debt Issue Costs 542,246 50,590 - - 592,836 - I Electric Plant Acquisition (Net of Amortization) 520,536 - - - 520,536 - Capital Assets: Land and Land Improvements 4,205,199 892,333 4,500 3,418,997 8,521,029 - Plant in Service 41,291,352 44,206,627 38,226,297 37,131,691 160,855,967 33,393,271 Machinery and Equipment - - 1,827,065 621,630 2,448,695 14,287,456 Construction in Progress 548,458 5,132 - - 553,590 - Total Cost 46,045,009 45,104,092 40,057,862 41,172,318 172,379,281 47,680,727 Less Accumulated Depreciation (11,252,143) (9,595,785) (8,474,391) (8,761,757) (38,084,076) (12,208,489) Net Capital Assets 34,792,866 35,508,307 31,583,471 32,410,561 134,295,205 35,472,238 Total Noncurrent Assets 37,016,795 38,543,558 33,086,468 32,410,561 141,057,382 35,837,238 Total Assets $ 60,893,938 $ 41,769,736 $ 47,994,636 $ 48,975,195 $ 199,633,505 $ 47,404,937 LIABILITIES AND NET ASSETS: Current Liabilities: Accounts Payable $ 2,957,923 $ 298,218 $ 5,978 $ 4,276 $ 3,266,395 $ 242,542 Due to Other Funds 40 68,892 51,573 17,191 137,696 - Current Compensated Absences - - 12,000 11,706 23,706 735,000 Liabilities Payable from Restricted Accounts: Current Portion of Revenue Bonds 661,000 104,000 - - 765,000 - Accrued Interest Payable 365,042 29,493 - - 394,535 - Customer Deposits 1,061,147 1,900 - - 1,063,047 - Total Current Liabilities 5,045,152 502,503 69,551 33,173 5,650,379 977,542 Noncurrent Liabilities: Unearned Revenue 456 69,591 - - 70,047 - Customer Advances 43,855 7,833 - - 51,688 - Compensated Absences - - 32,408 - 32,408 827,320 Revenue Bonds (Net of Unamortized Bond Premium and Unamortized Loss on Advance Refunding) 18,847,482 1,464,879 - - 20,312,361 - Net OPEB Obligation - 7,600 7,600 15,200 420,884 Total Noncurrent Liabilities 18,891,793 1,542,303, 40,008 7,600 20,481,704 1,248,204 Total Liabilities 23,936,945 2,044,806 109,559 40,773 26,132,083 2,225,746 Net Assets: Invested in Capital Assets, Net of Related Debt 16,347,166 33,990,018 31,583,471 32,410,561 114,331,216 35,472,238 Restricted for: Debt t Service 541,417 52,334 - - 593,751 - Capital Improvements - 2,980,861 - 2,980,861 - Unrestricted 20,068,410 2,701,717 16,301,606 16,523,861 55,595,594 9,706,953 Total Net Assets 36,956,993 39,724,930 47,885,077 48,934,422 173,501,422 45,179,191 Total Liabilities and Net Assets $ 60,893,938 $ 41,769,736 $ 47,994,636 $ 48,975,195 $ 199,633,505 $ 47,404,937 The Notes to the Financial Statements are an integral part of this statement. 32 1 1 CITY OF SHAKOPEE I Scott County, Minnesota STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS - PROPRIETARY FUNDS 1 For the Year Ended December 31, 2009 Business -Type Activities - Enterprise Funds I Governmental Activities - Storm Internal Service Electric Water Sewer. Drainage Total Funds I OPERATING REVENUES: Charges for Services $ 34,085,001 $ 3,588,299 $ 3,444,044 $ 1,320,566 $ 42,437,910 $ Rental and Other Charges - 2,882,428 Total Operating Revenues 34,085,001 3,588,299 3,444,044 1,320,566 42,437,910 2,882,428 I OPERATING EXPENSES: Operations and Maintenance 27,576,602 2,141,588 2,680,090 611,220 33,009,500 - Depreciation 1,447,426 1,092,058 718,027 653,041 3,910,552 1,688,168 I Amortization 86,144 - - - 86,144 - Employee Benefits 936,400 Total Operating Expenses 29,110,172 3,233,646 3,398,117 1,264,261 '37,006,196 2,624,568 I Operating Income 4,974,829 354,653 45,927 56,305 5,431,714 257,860 NONOPERATING REVENUES (EXPENSES): Investment Income 236,486 19,002 544,252 537,239 1,336,979 372,490 • Special Assessments 19,358 - 19,358 Interest Expense (940,415) (72,459) (1,012,874) Gain on Sale of Asset 37,162 Amortization of Debt Issue Costs and I Loss on Refunding (90,255) (9,997) - - (100,252) - Other Income 187,098 17,199 22,480 84,994 311,771 Total Nonoperating Revenues (Expenses) (607,086) (46,255) 586,090 622,233 554,982 409,652 I Income before Capital Contributions and Transfers 4,367,743 308,398 632,017 678,538 5,986,696 667,512 Capital Contributions 121,536 1,712,874 176,647 144,420 2,155,477 31,138 Transfers In - - - - - 1,094,988 Transfers Out (1,095,202) (726,200) (204,782? (149,340) (2,175,524) (415,497) Change in Net Assets 3,394,077 1,295,072 603,882 673,618 5,966,649 1,378,141 I NET ASSETS: Beginning of Year 33,562,916 37,142,273 47,281,195 48,260,804 166,247,188 43,801,050 Prior Period Adjustment - 1,287,585 - 1,287,585 - Beginning of Year, As Restated 33,562,916 38,429,858 47,281,195 48,260,804 167,534,773 43,801,050 I End of Year $ 36,956,993 $ 39,724,930 $ 47,885,077 $ 48,934,422 $ 173,501,422 $ 45,179,191 1 1 1 1 The Notes to the Financial Statements are an integral part of this statement. 33 1 1 CITY OF SHAKOPEE Scott County, Minnesota STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS For the Year Ended December 31, 2009 Business -Type Activities - Enterprise Funds I Governmental Activities - I Storm Internal Electric Water Sewer Drainage Total Service Funds CASH FLOWS - OPERATING ACTIVITIES: Receipts from Customers and Users $ 34,521,789 $ 3,702,598 $ 3,480,742 $ 1,301,551 $ 43,006,680 $ 2,882,428 Payments to Suppliers (24,833,612) (797,923) (2,392,472) (249,622) (28,273,629) - Payments to Employees (2,999,457) (1,349,716) (252,476) (356,875) (4,958,524) (621,115) Payments for Interfund Services - - (24,480) (8,160) (32,640) - Net Cash Flows - Operating Activities 6,688,720 1,554,959 811,314 686,894 9,741,887 2,261,313 1 CASH FLOWS - NONCAPITAL FINANCING ACTIVITIES: Cash Implicitly Financed to (from) Other Funds 1,029,246 (1,029,246) - Proceeds from Sale of Assets 453,111 5,643 - - 458,754 - Transfer from Other Funds - - - - - 1,094,988 Transfer to Other Funds (905,441) (726,200) (204,782) (149,340) (1,985,763) (415,497) Net Cash Flows - Noncapital Financing Activities 576,916 (1,749,803) (204,782) (149,340) (1,527,009) 679,491 ' CASH FLOWS - CAPITAL AND RELATED FINANCING ACTIVITIES: Principal Paid on Debt (10,888,000) (102,000) - - (10,990,000) - 1 Interest Paid on Debt (1,164,690) (73,932) - - (1,238,622) - Capital Contributions - 1,696,504 - - 1,696,504 - Trunk Charges - - 22,480 84,994 107,474 - Capital Related Special Assessments - - 82,927 - 82,927 - Interfund Loan for Capital Acquisition - - 145,000 - 145,000 - Proceeds from Disposal of Capital Assets - - - - - 54,162 Acquisition of Capital Assets (800,471) (385,196) (255,068) (170,591) (1,611,326) (486,006) Net Cash Flows - Capital and Related Financing Activities (12,853,161) 1,135,376 (4,661) (85,597) (11,808,043) (431,844) CASH FLOWS - INVESTING ACTIVITIES: Proceeds (Purchases) of Investments 8,979,906 368,642 (1,428,647) (1,347,534) 6,572,367 (2,676,355) 1 Payment Received for Notes Receivable - - - - - 115,000 Interest and Dividends Received 423,506 28,315 545,628 540,105 1,537,554 366,519 Net Cash Flows - Investing Activities 9,403,412 396,957 (883,019) (807,429) 8,109,921 (2,194,836) Net Change in Cash and Cash Equivalents 3,815,887 1,337,489 (281,148) (355,472) 4,516,756 314,124 1 CASH AND CASH EQUIVALENTS: Beginning of Year 8,429,308 1,261,202 1,462,629 1,701,215 12,854,354 1,761,233 1 End of Year $ 12,245,195 $ 2,598,691 $ 1,181,481 $ 1,345,743 $ 17,371,110 $ 2,075,357 RECONCILIATION OF CASH AND CASH I EQUIVALENTS TO THE STATEMENT OF NET ASSETS: Restricted Accounts $ 1,967,606 $ 3,066,488 $ - $ - $ 5,034,094 $ - Other Accounts 100,000 - - - 100,000 Cash and Investments 19,410,385 2,767,962 14,222,217 16,199,547 52,600,111 11,415,147 Subtotal 21,477,991 5,834,450 14,222,217 16,199,547 57,734,205 11,415,147 Less Long -Term Investments (9,232,796) (3,235,759) (13,040,736) (14,853,804) (40,363,095) (9,339,790) Cash and Cash Equivalents $ 12,245,195 $ 2,598,691 $ 1,181,481 $ 1,345,743 $ 17,371,110 $ 2,075,357 1 The Notes to the Financial Statements are an integral part of this statement. 34 1 1 CITY OF SHAKOPEE I Scott County, Minnesota STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS For the Year Ended December 31, 2009 1 (Continued) Business -Type Activities - Enterprise Funds 1 Governmental Activities - Storm Internal Electric Water Sewer Drainage Total Service Funds 1 RECONCILIATION OF OPERATING INCOME TO NET CASH FLOWS - OPERATING ACTIVITIES: Operating Income $ 4,974,829 $ 354,653 $ 45,927 $ 56,305 $ 5,431,714 $ 257,860 I Adjustments to Reconcile Operating Income to Net Cash Flows - Operating Activities: Miscellaneous Revenue 187,098 17,199 - - 204,297 - Free Electric Service to the City (189,761) - - - (189,761) - 1 Depreciation and Amortization Expense 1,533,570 1,092,058 718,027 653,041 3,996,696 1,688,168 Change in Assets and Liabilities: Accounts Receivable, Net 427,788 (19,494) 36,698 (19,015) 425,977 - Due from Other Funds (141,692) 44,537 - - (97,155) - 1 Prepaid Items 1,406 468 - 1,874 - - Inventory (2,241) (915) (3,156) Accounts Payable (238,904) (92,899) (23,622) (18,651) (374,076) - Customer Deposits 114,014 1,900 - - 115,914 - 1 Deferred Revenue (4,514) 69,591 _ 65,077 - - Customer Advances 43,855 566 44,421 Due to Other Funds (36,253) 68,892 27,093 9,031 68,763 Compensated Absences Payable - - 3,291 2,283 5,574 127,554 I Net OPEB Obligation - 3,900 3,900 7,800 187,731 Other Liabilities 19,525 18,403 37,928 Total Adjustments 1,713,891 1,200,306 765,387 630,589 4,310,173 2,003,453 Net Cash Flows - Operating Activities $ 6,688,720 $ 1,554,959 $ 811,314 $ 686,894 $ 9,741,887 $ 2,261,313 NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES: Contributions of Capital Assets from the - - - Municipality and Developers $ 121,536 $ 16,370 $ $ 45,120 $ 183,026 $ 31,138 Purchases of Capital Assets on Account 242,542 Free Electric Service to the City 189,761 - - - 189,761 - 1 1 1 1 1 1 The Notes to the Financial Statements are an integral part of this statement. 35 1 1 CITY OF SHAKOPEE Scott County, Minnesota STATEMENT OF FIDUCIARY NET ASSETS December 31, 2009 Escrow Agency Fund ASSETS: 1 Cash and Investments $ 1,728,370 LIABILITIES: 1 Accounts Payable $ 18,440 Deposits Payable 1,709,930 Total Liabilities $ 1,728,370 1 1 1 1 1 1 1 1 1 1 The Notes to the Financial Statements are an integral part of this statement. 36 1 1 CITY OF SHAKOPEE Scott County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2009 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1 A. Reporting Entity The City of Shakopee is a statutory city governed by an elected mayor and four council members. The accompanying financial statements present the government entities for which the government is considered to be financially accountable. The financial statements present the City and its component units. The City includes all funds, organizations, institutions, agencies, departments and offices that are not legally separate from such. Component units are legally separate organizations for which the elected officials of the City are financially accountable and are included within the financial statements of the City because of the significance of their operational or financial relationships with the City. The City is considered financially accountable for a component unit if it appoints a voting majority of the organization's governing body and it is able to impose its will on the organization by significantly influencing the programs, projects, activities or level of services performed or provided by the organization or there is a potential for the organization to provide specific financial benefits to or impose specific financial burdens on, the City. As a result of applying the component unit definition criteria above, certain organizations have been defined and are presented in this report as follows: Blended Component Unit — Reported as if they were part of the City. Joint Ventures and Jointly Governed Organizations — The relationship of the City with the entity is disclosed. L For each of the categories above, the specific entities are identified as follows: 1. Blended Component Unit The Shakopee Economic Development Authority (EDA) was organized to promote development, improve housing and reduce blighted areas in the City. It is included by reason of the City Council having final approval for Shakopee EDA actions and the Shakopee EDA Board being comprised entirely of City Council Members. City staff handles Shakopee EDA activity including Shakopee EDA funds and the City approves Shakopee EDA tax levies and bonding activity. Therefore, the City has financial oversight for Shakopee EDA activities, The activity of the Shakopee EDA is shown in the Shakopee EDA Special Revenue Fund in the City's financial statements. No separate financial statements for the Shakopee EDA are issued. For any information desired beyond what is presented in this report, contact the Finance Director for the City of Shakopee at 129 Holmes Street South, Shakopee, Minnesota 55379 -1351. 37 i 1 CITY OF SHAKOPEE 1 Scott County, Minnesota NOTES TO THE FINANCIAL STATEMENTS 1 December 31, 2009 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity (Continued) 1 2. Joint Ventures and Jointly Governed Organizations Local Government Information Systems Local Government Information Systems (LOGIS) is a joint venture of approximately 44 governmental entities that provides computerized data processing and support services to its members. Legally separate, the City does not appoint a voting majority of the Board and LOGIS is fiscally independent of the City. During 2009, the City paid $ 157,202 to LOGIS for services provided which is included in expenditures of the General Fund. Financial statements are available by contacting LOGIS, 5750 Duluth Street, Golden Valley, Minnesota 55422 -4036. Scott Joint Prosecution Association Scott Joint Prosecution Association ( "SJPA ") is a joint venture of approximately seven cities 1 that provides legal prosecution and support services to its members. Legally separate, the City does not appoint a voting majority of the Board of Directors and the SJPA is fiscally independent of the City. During 2009, the City paid $ 409,137 to the SJPA for services provided which is included in expenditures of the General Fund. Financial statements are available by contacting the SJPA, 200 Fourth Avenue West, Shakopee, Minnesota 55379. 3. Other Organizations 1 Shakopee Volunteer Fire Department Relief Association 1 The Shakopee Volunteer Fire Department Relief Association (the "Association ") is organized as a nonprofit organization, legally separate from the City, by its members to provide pensions and other benefits to such members in accordance with Minnesota Statutes. It is not a component unit of the City because the Board of Directors is appointed by the membership of the Association and not by the City Council. The financial oversight of the City is limited to approval authority for amending the Association bylaws when the change results in an increase in the pension benefit level requiring an increased City contribution. The Association has the authority to levy its own taxes for pensions and deficits and would continue to exist for its members if the City was dissolved. Because the Association is fiscally independent of the City, the financial statements of the Association have not been included within the City's reporting entity. 1 1 38 1 1 CITY OF SHAKOPEE Scott County, Minnesota 1 NOTES TO THE FINANCIAL STATEMENTS December 31, 2009 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 1 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 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 1 function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Interest on general long -term debt is considered an indirect expense and is reported separately in the Statement of Activities. Program revenues include 1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Internally dedicated revenues are reported as general revenues rather than program revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. The Escrow Agency Fund is presented in the fiduciary fund financial statements. Since, by definition, these assets are being held for the benefit of a third party (other local governments, private parties, etc.) and cannot be used to address activities or obligations of the City, this Fund is not incorporated into the government -wide statements. C. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. The agency fund reports only assets and liabilities and has no measurement focus, but does use the accrual basis of accounting to recognize receivables and payables. 1 39 1 CITY OF SHAKOPEE ' Scott County, Minnesota NOTES TO THE FINANCIAL STATEMENTS ' December 31, 2009 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 compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, franchise taxes, licenses and interest associated with the current fiscal period are 1 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 Funds: General Fund — This Fund is the City's primary operating fund. It accounts for all financial resources of the general City, except those required to be accounted for in another fund. 2004A Improvement Bonds Debt Service Fund — This Fund accounts for resources accumulated and payments made for principal and interest on this bond issue. Proprietary Funds: Electric Fund — This Fund accounts for the operations of the City's electric utility. 1 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 utility. 1 40 1 1 CITY OF SHAKOPEE Scott County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2009 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued) Description of Funds: (Continued) Internal Service Funds: Equipment Fund — This Fund accounts for the City's acquisition of larger pieces of equipment. Building Fund — This Fund accounts for the City's funds accumulated for construction, improvement or major repairs of major public buildings. Park Assets Fund — This Fund accounts for the City's funds accumulated for the replacement of park assets. Employee Benefits Fund — This Fund accounts for the City's funds accumulated for compensated absences and OPEB. 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 are held on behalf of builders and developers, for security deposits and police evidence deposits. All of the City's internal service funds are governmental in nature and are combined with governmental activities in the government -wide financial statements. 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. 1 41 1 CITY OF SHAKOPEE 1 Scott County, Minnesota NOTES TO THE FINANCIAL STATEMENTS 1 December 31, 2009 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued) Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the enterprise funds are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City's policy to use Y p Y restricted resources first, then unrestricted resources as they are needed. D. Assets, Liabilities and Net Assets or Equity 1. Deposits and Investments 1 The City's cash and cash equivalents are considered to be cash on hand, demand deposits and highly liquid debt instruments purchased with original maturities of three months or less from the date of acquisition. Investments are stated at fair value. Minnesota Statutes authorizes the City to invest in obligations of the U.S. Treasury, agencies and instrumentalities, shares of investment companies whose only investments are in the aforementioned securities, obligations of the State of Minnesota or its municipalities, bankers' acceptances, future contracts, repurchase and reverse repurchase agreements and commercial paper of the highest quality with a maturity of no longer than 270 days and in the Minnesota Municipal Money Market Fund. The Minnesota Municipal Money Market Fund is an external investment pool not registered 1 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. 1 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, concentration of credit risk and custodial credit risk for investments. The City's Electric and Water Enterprise Funds (Shakopee Public Utilities Commission) also have a formal policy to address all of these risks except custodial credit risk for investments. 1 42 1 1 CITY OF SHAKOPEE Scott County, Minnesota 1 NOTES TO THE FINANCIAL STATEMENTS December 31, 2009 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES D. Assets, Liabilities and Net Assets or Equity (Continued) 1. Deposits and Investments (Continued) Custodial Credit Risk — Deposits: This is the risk that in the event of a bank failure, the City's deposits may not be returned to it. Minnesota Statutes require all deposits be protected by federal deposit insurance, corporate surety bonds or collateral. The market value of collateral pledged must equal 110% of deposits not covered by Federal Deposit Insurance Corporation (FDIC) insurance or corporate surety bonds and letters of credit. The City's 1 investment policy and the investment policy for the City's Electric and Water Enterprise Funds (Shakopee Public Utilities Commission) state deposits must be collateralized in order to comply with Minnesota Statutes. 1, Credit Risk: This is the risk that an issuer or other counterparty to an investment will not fulfill its obligation to the holder of the investment. Minnesota Statutes 118A.04 and 188A.05 limit investments that are in the top two ratings issued by nationally recognized statistical rating organizations. The City's investment policy references Minnesota Statutes and further limits the types of investments that the City is allowed to invest in. The investment policy for the City's Electric and Water Enterprise Funds (Shakopee Public Utilities Commission) also defines suitable and authorized investments and related minimum ratings. 1 Interest Rate Risk: This is the risk that changes in market interest rates will adversely affect the fair value of an investment. The City's policy states the investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs. To the extent possible, the City shall attempt to match its investments in short-term operating funds with anticipated cash flow requirements. Unless matched to a specific cash flow, the City will not directly invest in securities maturing more than ten years from the date of 1 purchase. Long -term funds shall not be invested in securities exceeding 10 years in modified duration, at time of purchase. The investment policy for the City's Electric and Water Enterprise Funds (Shakopee Public Utilities Commission) addresses this risk by requiring holding of securities to maturity (subject to certain exceptions) and limiting maturity constraints to a relatively short duration. 1 1 1 43 1 1 CITY OF SHAKOPEE ' Scott County, Minnesota NOTES TO THE FINANCIAL STATEMENTS 1 December 31, 2009 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES D. Assets, Liabilities and Net Assets or Equity (Continued) 1 1. Deposits and Investments (Continued) Concentration of Credit Risk: This is the risk of loss attributed to the magnitude of an 1 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. • Having all investments, other than those in direct obligations or agencies of the United States, secured by collateral or repurchase agreements, shall not exceed 50% of the aggregate investment portfolio. Mortgage backed securities shall not exceed 35% of the aggregate investment portfolio, at the time of investment (i.e., commercial paper or bankers' acceptance). • Limiting investments in any one corporation to 5% of the aggregate investment portfolio. The investment policy for the City's Electric and Water Enterprise Funds (Shakopee Public Utilities Commission) defines suitable and authorized investments and related minimum ratings as well as application of prudent person standards in construction of portfolio management and diversification. Custodial Credit Risk — Investments: For an investment, this is the risk that in the event of 1 the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City's investment policy states all securities purchased, including appropriate collateral, shall be placed with an independent third party for custodial safekeeping. 1 1 44 i 1 I CITY OF SHAKOPEE Scott County, Minnesota 1 NOTES TO THE FINANCIAL STATEMENTS December 31, 2009 I NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 11 D. Assets, Liabilities and Net Assets or Equity (Continued) 2. Receivables and Payables 1 Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as "advances to /from other funds ". All I 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 ". 1 All trade and property tax receivables are shown at a gross amount since both are assessable to the property taxes and are collectible upon the sale of the property. 1 The City levies its property tax for the subsequent year during the month of December. December 28 is the last day the City can certify a tax levy to the County Auditor for collection the following year. Such taxes become a lien on January 1 and are recorded as I receivables by the City at that date. The property tax is recorded as revenue when it becomes measurable and available. Scott County is the collecting agency for the levy and remits the collections to the City three times a year. The tax levy notice is mailed in March with the I first half of the payment due on May 15 and the second half due on October 15. Taxes not collected as of December 31 each year are shown as delinquent taxes receivable. I 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. I 3. Inventory, Prepaid Items and Other Assets I 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 I assets include unamortized debt issuance costs for the Electric and Water Enterprise Funds. 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 I Sheets because they accumulate insignificant inventories. I 45 1 CITY OF SHAKOPEE Scott County, Minnesota NOTES TO THE FINANCIAL STATEMENTS 1 December 31, 2009 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES D. Assets, Liabilities and Net Assets or Equity (Continued) 1 4. Restricted Assets Certain cash and investments in the enterprise funds are classified as restricted. The Electric 1 Fund has monies restricted for customer deposits and debt service. The Water Fund has monies restricted for water production and trunk distribution facility acquisition, based on trunk and connection fees collected from users, construction projects and debt service. 5. Capital Assets Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads e. p � p p Yip � ( g 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 1 the City, excluding the Electric and Water Enterprise Funds (Shakopee Public Utilities Commission), as assets with an initial, individual cost of more than $ 5,000 and an estimated useful life in excess of one year. Capital assets for the Electric and Water Enterprise Funds (Shakopee Public Utilities Commission) are defined as assets with an initial, individual cost of more than $ 1,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Property, plant and equipment of the City are depreciated using the straight -line method over the following estimated useful lives. Assets Years Buildings 30 -50 Park Buildings 30 Building Improvements 25 Light Vehicles 4 -10 Machinery and Equipment 4 -20 Utility Distribution System 50 -75 Infrastructure 30 -50 Fire Trucks 20 -25 1 46 1 CITY OF SHAKOPEE Scott County, Minnesota 1 NOTES TO THE FINANCIAL STATEMENTS December 31, 2009 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES D. Assets, Liabilities and Net Assets or Equity (Continued) 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 have matured and are ' expected to be liquidated with expendable financial resources. City employees earn vacation time based on years of City service. Employees who have 0 to 15 years of employment may accumulate no more than 240 hours. Employees who have 16 or more years of service may accumulate no more than 360 hours of vacation leave. Upon termination, employees will receive compensation for all unused vacation. Employees earn sick leave at a rate of 3.69 hours per pay period and may accumulate to a maximum of 960 hours. The City compensates employees who leave municipal service at the rate of 45% up to 15 years of ' service. After 15 years of service, employees who leave are compensated at the rate of 55% plus 2% for each year of service beyond 15 years up to 75% of unused sick leave. 1 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 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 1 plans that are subject to change. • ' 47 1 CITY OF SHAKOPEE 1 Scott County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2009 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES D. Assets, Liabilities and Net Assets or Equity (Continued) 9. Net Assets Net assets represent the difference between assets and liabilities in the government -wide 1 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. 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 b g g Pp Y 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. 1 3. The budget is legally enacted through passage of a resolution after obtaining taxpayer comments. i 48 ' CITY OF SHAKOPEE Scott County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2009 NOTE 2 — STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary Information (Continued) 4. Expenditures may not legally exceed budgeted appropriations at the division level. No ' fund's budget can be increased without City Council approval. The City Council may authorize transfer of budgeted amounts between divisions within any fund. Management may amend budgets within a division level, so long as the total division budget is not ' changed. 5. Annual 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 budgets are not adopted. ' 6. Budgeted amounts are as originally adopted or as amended by the City Council. Individual amendments were not material in relation to the original amounts budgeted, 1 except for transfers in the General, Telecommunication and Recreation Funds. B. Deficit Fund Balances 1 The following Funds had deficit balances at December 31, 2009: 1 Nonmajor Governmental Funds: Capital Projects: ' Park Reserve $ 1,267,988 2009 Projects 610,312 2010 Projects 39,366 1 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 1 In accordance with applicable Minnesota Statutes, the City maintains deposits at depository banks authorized by the City Council. 1 Custodial Credit Risk: As of December 31, 2009, the City's bank balances, including the Electric and Water Enterprise Funds (Shakopee Public Utilities Commission), were not exposed to custodial credit risk because they were insured through FDIC and properly collateralized with securities held by the pledging financial institutions' trust departments or agents in the City's name. 49 1 1 CITY OF SHAKOPEE Scott County, Minnesota NOTES TO THE FINANCIAL STATEMENTS 1 December 31, 2009 NOTE 3 DEPOSITS AND INVESTMENTS A. Deposits (Continued) 1 As of December 31, 2009, the City had the following deposits: Deposits (All Funds but the Electric and $ 130,342 Water Enterprise Funds Deposits (Electric and Water Enterprise Funds) 5,654,422 1 Total Deposits $ 5,784 764 B. Short -Term Investments 111 As of December 31, 2009, the City had the following short-term investments for all funds, excluding the Electric and Water Enterprise Funds (Shakopee Public Utilities Commission). Investment Maturities 1 Fair Less than 1 - 5 Investment Type Value One Year Years Agency Bonds $ 10 975 080 $ 4 988 860 5,986,220 g Y � $ Agency Step -Up Bonds 1,970,060 - 1,970,060 Certificates of Deposit 2,948,367 - 2,948,367 Money Market Funds 4,289,257 4,289,257 - Total Investments $ 20,182,764 $ 9,278,117 $ 10,904,647 1 1 1 1 1 1 50 1 1 1 CITY OF SHAKOPEE Scott County, Minnesota 1 NOTES TO THE FINANCIAL STATEMENTS December 31, 2009 NOTE 3 — DEPOSITS AND INVESTMENTS 1 C. Long -Term Investments As of December 31, 2009, the City had the following long -term investments for all funds, 1 excluding the Electric and Water Enterprise Funds (Shakopee Public Utilities Commission). Modified I Fair Duration Moody's Value (Years) Rating I U.S. Treasury Notes $ 9,543,865 3.21 Aaa Agency Bonds: FAMC 1,055,940 1.46 Aaa 1 FFCB 4,154,619 0.80 Aaa FHLB 7,465,888 1.55 Aaa FHLMC 3,072,903 0.77 Aaa 1 FNMA 5,012,069 1.00 Aaa Agency Step -Up Bonds: I FNMA 649,470 1.31 Aaa Mortgage Bonds: CMO 3,305,379 1.06 Aaa I FHLMC 4,321,233 2.46 Aaa FNMA 3,323,983 2.47 Aaa GNMA 257,245 1.59 Aaa I Municipal Bonds 9,734,798 1.90 (Aal -A3) or NR Certificates of Deposit 246,737 1.48 NR Money Market Funds 1,242,900 N/A NR I Total Long-Term Investments 53,387,029 1.32 1 Total Investments $ 73,569,793 I 1 1 51 1 1 CITY OF SHAKOPEE 1 Scott County, Minnesota NOTES TO THE FINANCIAL STATEMENTS 1 December 31, 2009 NOTE 3 — DEPOSITS AND INVESTMENTS C. Long -Term Investments (Continued) 1 As of December 31, 2009, the City's Electric and Water Enterprise Funds (Shakopee Public Utilities Commission) had the following investments. I Investment Maturities Fair Less than 1 - 5 1 Investment Type Rating Value One Year Years U.S. Agencies Aaa $ 13,088,236 $ 9,515,132 $ 3,573,104 U.S. Treasuries Aaa 2,543,339 1,448,498 1,094,841 1 External Investment Pools N/A 5,878,003 5,878,003 - Money Market Funds N/A 147,141 147,141 - Total Investments $ 21,656,719 $ 16,988,774 $ 4,667,945 I Custodial Credit Risk — Investments: As of December 31, 2009, all investments of the City and I 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: The City's short-term investments in agency bonds and agency step -up bonds are 1 rated Aaa by Moody's. The City's short-term investments in certificates of deposit and money Markey funds are not rated. Concentration of Credit Risk: As of December 31, 2009, 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. 1 Investment Percentage of Issuer Type Portfolio 1 Federal Home Loan Bank (FHLB) U.S. Agencies 12.7% Federal Home Loan Mortgage Corporation (FHLMC) U.S. Agencies 18.0% I Federal National Mortgage Association (FNMA) U.S. Agencies 18.8% Federal Farm Credit Bank (FFCB) U.S. Agencies 5.6% The City's Electric and Water Enterprise Funds (Shakopee Public Utilities Commission) I investments in FHLB, FNMA and FHLMC also exceeded 5% of the total investments of those funds at December 31, 2009. 1 1 52 1 1 1 CITY OF SHAKOPEE Scott County, Minnesota 1 NOTES TO THE FINANCIAL STATEMENTS December 31, 2009 I NOTE 3 - DEPOSITS AND INVESTMENTS 1 C. Long -Term Investments (Continued) The following is a summary of total deposits and investments as of December 31, 2009: 1 Deposits (Note 3.A.) $ 5,784,764 Investments (All Funds but the Electric and I Water Enterprise Funds) - 73,569,793 Investments (Electric and Water Enterpirse Funds) 21,656,719 Petty Cash 2,400 I Total Deposits and Investments 101 p $ 101,013,676 1 Deposits and investments are presented in the December 31, 2009 basic financial statements as follows: 1 Statement of Net Assets: Cash and Investments $ 94,151,212 I Restricted and Other Accounts 5,134,094 Statement of Fiduciary Net Assets 1,728,370 1 Total Cash and Investments $ 101,013,676 I NOTE 4 - RECEIVABLES Governmental funds report deferred revenue in connection with receivables for revenues that are I 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: I Delinquent Delinquent Deferred Property Special Special I Taxes Assessments Assessments Total General Fund $ 312,696 $ 4,120 $ 23,657 $ 340,473 I 2004A Improvement Bonds - - 2,302,359 2,302,359 Nonmajor Funds 7,044 41,278 4,968,384 5,016,706 1 Total $ 319,740 $ 45,398 $ 7,294,400 $ 7,659,538 53 1 1 CITY OF SHAKOPEE I Scott County, Minnesota NOTES TO THE FINANCIAL STATEMENTS 1 December 31, 2009 NOTE 5 — CAPITAL ASSETS Capital asset activity for the year ended December 31, 2009 was as follows: 1 Beginning Ending Balance Increases Decreases Balance Governmental Activities: Capital Assets not being Depreciated: I Land $ 19,271,560 $ 197,580 $ - $ 19,469,140 Construction in Progress - 146,702 - 146,702 Total Capital Assets ' not being Depreciated 19,271,560 344,282 - 19,615,842 Capital Assets being Depreciated: 1 Buildings 33,501,391 90,727 - 33,592,118 Infrastructure 126,443,387 1,308,964 - 127,752,351 Machinery and Equipment 13,154,586 988,554 951,079 13,192,061 Total Capital Assets being Depreciated 173,099,364 2,388,245 951,079 174,536,530 Less Accumulated I Depreciation for: Buildings 6,833,273 890,114 - 7,723,387 Infrastructure 44,011,224 4,202,399 - 48,213,623 Machinery and Equipment 5,001,634 868,993 707,413 5,163,214 Total Accumulated Depreciation 55,846,131 5,961,506 707,413 61,100,224 1 Total Capital Assets being Depreciated, Net 117,253,233 (3,573,261) 243,666 113,436,306 1 Governmental Activities Capital Assets, Net $ 136,524,793 $ (3,228,979) $ 243,666 $133,052,148 I 1 1 1 54 1 1 1 CITY OF SHAKOPEE Scott County, Minnesota 1 NOTES TO THE FINANCIAL STATEMENTS December 31, 2009 1 NOTE 5 — CAPITAL ASSETS I Restated eginning Ending Balance Increases Decreases Balance Business -Type Activities: I Capital Assets not being Depreciated: Land $ 9,127,782 $ - $ 606,753 $ 8,521,029 I Construction in Progress 741 1,557,313 1,004,464 553,590 Total Capital Assets not being Depreciated 9,128,523 1,557,313 1,611,217 9,074,619 1 Capital Assets being Depreciated: Plant in Service 159,819,230 1,684,859 648,122 160,855,967 Machinery and Equipment 2,309,699 257,248 118,252 2,448,695 I Total Capital Assets being Depreciated 162,128,929 1,942,107 766,374 163,304,662 I Less Accumulated Depreciation for: Plant in Service 33,529,272 3,766,349 153,531 37,142,090 I Machinery and Equipment 829,378 144,203 31,595 941,986 Total Accumulated Depreciation 34,358,650 3,910,552 185,126 38,084,076 1 Total Capital Assets being Depreciated, Net 127,770,279 (1,968,445) 581,248 125,220,586 I Business -Type Activities Capital Assets, Net $ 136,898,802 $ (411,132) $ 2,192,465 $ 134,295,205 1 1 1 1 1 55 1 1 CITY OF SHAKOPEE 1 Scott County, Minnesota NOTES TO THE FINANCIAL STATEMENTS 1 December 31, 2009 NOTE 5 — CAPITAL ASSETS Depreciation expense was charged to functions /programs of the City as follows: 1 Governmental Activities: General Government $ 259,252 1 Public Safety 503,078 Public Works 4,500,702 Park and Recreation 698,474 1 Total Depreciation Expense - Governmental Activities $ 5,961,506 Business -Type Activities: Electric $ 1,447,426 Water 1,092,058 Sanitary Sewer 718,027 Storm Drainage 653,041 Total Depreciation Expense - Business -Type Activities $ 3,910,552 NOTE 6 — LONG -TERM DEBT 1 A. General Obligation Bonds The City issues general obligation (G.O.) bonds to provide for financing tax increment projects, street improvements and construction of government buildings. Debt service is covered respectively by tax increments and special assessments against benefited properties with any shortfalls being paid from general taxes. G.O. bonds are direct obligations and pledge the full faith and credit of the City. These bonds generally are issued as serial bonds with equal debt service payments each year. G.O. bonds currently outstanding are shown on the following page. B. Revenue Bonds 1 The City issues Revenue Bonds for electric and water activity. Debt service is covered through the revenue producing activities of these funds. 1 56 1 1 1 CITY OF SHAKOPEE Scott County, Minnesota 1 NOTES TO THE FINANCIAL STATEMENTS December 31, 2009 NOTE 6 — LONG -TERM DEBT 1 C. Components of Long -Term Liabilities Issue Interest Original Final Principal Due Within I Date Rates Issue Maturity Outstanding One Year Governmental Activities: G.O. Bonds: G.O. Improvement Bonds: I 1998B 12/01/98 4.0 % -4.4% $ 2,375,000 02/01/10 $ 195,000 $ 195,000 2000A 09/19/00 4.45 % - 4.95% 2,560,000 02/01/11 465,000 240,000 2002A 02/01/02 3.0 % -4.3% 1,185,000 02/01/12 410,000 135,000 2002B 07/01/02 2.0 % -4.1% 3,750,000 02/01/13 800,000 205,000 I 2003A 07/01/03 2.0 % -3.0% 2,215,000 02/01/14 795,000 130,000 2004A 05/01/04 2.25 %4.10% 4,225,000 02/01/25 2,555,000 420,000 2004C 11/01/04 3.0 % -4.0% 2,570,000 02/01/15 1,520,000 250,000 2006A 07/01/06 4.00% 3,440,000 02/01/17 2,815,000 325,000 I 2007A 02/01/07 4.00% 1,370,000 02/01/17 1,150,000 110,000 2007B 09/01/07 4.00% 1,445,000 02/01/18 1,325,000 140,000 2008A 09/01/08 3.5 % -4.0% 2,170,000 02/01/19 2,170,000 365,000 G.O. Building Refunding I Bonds 2004B 05/01/04 2.25 % - 4.00% 2,275,000 02/01/17 1,605,000 175,000 G.O. Capital Improvement Bonds 2004D 11/01/04 2.5 % -4.2% 6,000,000 02/01/25 5,150,000 240,000 Total G.O. Bonds 20,955,000 2,930,000 I Compensated Absences 1,562,320 735,000 Net OPEB Obligation 420,884 - Total Governmental I Activities $ 22,938,204 $ 3,665,000 Issue Interest Original Final Principal Due Within Date _ Rates Issue Maturity Outstanding One Year I Business -Type Activities: Revenue Bonds Including Refunding Bonds: Bonds 2003A 05/01/03 2.25 % -4.45% $ 3,385,000 08/01/18 $ 2,240,000 $ 215,000 I Bonds 2004A 10/01/04 3.5 % -4.5% 9,830,000 02/01/28 9,425,000 225,000 Bonds 2006A 11/21/06 4.125 % - 4.375% 10,570,000 02/01/30 10,570,000 325,000 Total Revenue Bonds 22,235,000 765,000 I Unamortized Loss on Refunding (1,197,321) (68,434) Unamortized Bond Premium 39,682 4,715 Compensated Absences 56,114 23,706 Net OPEB Obligation 15,200 - I Total Business -Type Activities $ 21,148,675 $ 724,987 Long -term bonded indebtedness listed above were issued to finance acquisition and construction 1 of capital facilities or to refinance (refund) previous bond issues. 1 1 57 1 CITY OF SHAKOPEE 1 Scott County, Minnesota NOTES TO THE FINANCIAL STATEMENTS Il December 31, 2009 NOTE 6 — LONG -TERM DEBT 1 D. Changes in Long -Term Liabilities 1 Long -term liability information for the year ended December 31, 2009 was as follows. Beginning Ending 1 Balance Additions Reductions Balance Governmental Activities: Bonds Payable: G.O. Bonds $ 23,615,000 $ - $ 2,660,000 $ 20,955,000 Compensated Absences 1,434,766 868,470 740,916 1,562,320 Net OPEB Obligation 233,153 187,731 - 420,884 I Total Governmental Activities $ 25,282,919 $ 1,056,201 $ 3,400,916 $ 22,938,204 Business -Type Activities: I Revenue Bonds $ 33,225,000 $ - $ 10,990,000 $ 22,235,000 Unamortized Bond Premium 44,397 - 4,715 39,682 Unamortized Loss on Refunding (965,534) (300,221) (68,434) (1,197,321) Compensated Absences 50,540 29,978 24,404 56,114 Net OPEB Obligation 7,400 7,800 - 15,200 Total Business -Type Activities $ 32,361,803 $ (262,443) $ 10,950,685 $ 21,148,675 The General Fund, Recreation Special Revenue Fund, Employee Benefits Internal Service Fund and Sewer and Storm Drainage Enterprise Funds typically liquidate the liability related to compensated absences. 1 E. Governmental Activity G.O. Bonds Debt service to maturity for outstanding G.O. bonds is as follows: 1 Year Ending December 31, Principal Interest Total 1 2010 $ 2,930,000 $ 766,109 $ 3,696,109 I 2011 2,375,000 669,092 3,044,092 2012 2,265,000 583,384 2,848,384 2013 2,245,000 521,603 2,766,603 2014 2,030,000 419,248 2,449,248 2015 -2019 6,250,000 1,155,365 7,405,365 2020 -2024 2,345,000 393,123 2,738,123 2025 515,000 11,964 526,964 Total $ 20,955,000 $ 4,519,888 $ 25,474,888 1 58 1 1 1 CITY OF SHAKOPEE Scott County, Minnesota 1 NOTES TO THE FINANCIAL STATEMENTS December 31, 2009 I NOTE 6 — LONG-TERM DEBT 1 F. Business -Type Activity Revenue Bonds Debt service to maturity for outstanding revenue bonds is as follows: 1 Year Ending December 31, Principal Interest Total 1 2010 $ 765,000 $ 936,244 $ 1,701,244 2011 780,000 907,232 1,687,232 1 2012 830,000 876,541 1,706,541 2013 825,000 844,511 1,669,511 2014 875,000 811,044 1,686,044 1 2015 -2019 4,875,000 3,448,222 8,323,222 2020 -2024 6,150,000 2,266,749 8,416,749 1 2025 -2029 6,370,000 808,704 7,178,704 2030 765,000 16,734 781,734 1 Total $ 22,235,000 $ 10,915,981 $ 33,150,981 NOTE 7 — CONDUIT DEBT OBLIGATIONS 1 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 I 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. I As of December 31, 2009, the following onduit debt was outstanding: : g 1 Date of Original Amount Balance Project Issue of Issue Retired Outstanding 1 St. Francis RMC 10/06/04 $ 52,520,000 $ 2,695,000 $ 49,825,000 St. Francis RMC 12/23/87 8,000,000 3,710,000 4,290,000 1 Total $ 54,115,000 I 59 1 CITY OF SHAKOPEE 1 Scott County, Minnesota NOTES TO THE FINANCIAL STATEMENTS 1 December 31, 2009 NOTE 8 — PLEDGING AGREEMENTS The City has pledged its taxing authority to back certain revenue bonds issued by the Scott 1 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 1997A, 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 called on February 1, 2008. The outstanding issues at December 31, 2009 were: 1 • 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 $ 905,000 and payments are scheduled from February 1, 2007 to 2018, with interest ranging from 5.7% to 6.25 %. • Scott County CDA Housing Development Refunding Revenue Bonds, Series 2006E, the 1 amount is $ 1,225,000 and payments are scheduled from February 1, 2018 to 2024, with interest ranging from 4.5% to 4.7 %. 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: 1 • Scott County CDA Housing Development Revenue Bonds, Series 2003, the amount is $ 6,640,000 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 an Imagine! Print Solutions, formally known as Challenge Printing, facility moving to Shakopee. The Shakopee EDA issued a Taxable Tax Increment Revenue Note in the amount of $ 513,900 in support of development costs for the Imagine! Print Solutions project. Imagine! Print Solutions is the holder of the note. The Shakopee EDA is liable only to the extent of the tax increment received from the Imagine! Print Solutions property. The interest on the note is 6.0 %. Payments are scheduled semiannually from August 1, 2006 to February 1, 2015. 1 1 60 1 ' CITY OF SHAKOPEE Scott County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2009 NOTE 8 — PLEDGING AGREEMENTS 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. 1 NOTE 9 — INTERFUND ASSETS/LLABILITIES The composition of interfund balances as of December 31, 2009 is as follows: Receivable Fund Payable Fund Amount General Fund Nonmajor Governmental Funds $ 600,000 General Fund Water Fund 68,892 Electric Fund Sewer Fund 51,573 Electric Fund General Fund 114,599 Water Fund Storm Drainage Fund 17,191 Sewer Fund Nonmajor Governmental Funds 1,505,000 General Fund Electric Fund 40 Water Fund General Fund 1,508 � Total $ 2,358,803 The due from/due to other funds balances generally represent borrowing to resolve deficit cash balances and billing expenses. The $ 1,505,000 balance represents an advance from the Sewer Fund to the Park Reserve Fund which will be repaid in annual payments ranging from $ 210,000 to $ 350,000 through 2017. 1 1 1 1 61 1 CITY OF SHAKOPEE 1 Scott County, Minnesota NOTES TO THE FINANCIAL STATEMENTS 1 December 31, 2009 NOTE 10 — INTERFUND TRANSFERS Transfer In Nonmajor Internal General Governmental Service Fund Funds Funds Total Transfer Out: General Fund $ - $ 1,649,572 $ - $ 1,649,572 Nonmajor Governmental Funds 326,900 390,640 1,094,988 1,812,528 Electric Fund 1,095,202 - - 1,095,202 Water Fund 726,200 - - 726,200 Sewer Fund 50,000 154,782 - 204,782 Storm Drainage Fund 50,000 99,340 - 149,340 Internal Service Funds - 415,497 - 415,497 Total $ 2,248,302 $ 2,709,831 $ 1,094,988 $ 6,053,121 1 Transfers were made according to budgets for operating purposes, to close funds, to finance projects and for the cancellation of the debt service levy. 1 NOTE 11 RISK MANAGEMENT The City purchases commercial insurance coverage through the League of Minnesota Cities 1 Insurance Trust (LMCIT) with other cities in the state which is a public entity risk pool currently operating as a common risk management and insurance program. The City pays an annual premium to the LMCIT for its insurance coverage. The LMCIT is self - sustaining through member premiums and reinsures through commercial companies for excess claims. The City is covered through the pool for any claims incurred but unreported, but retains risk for the deductible portion of its insurance policies. The amount of these deductibles ranges from $ 2,500 to $ 5,000 and is considered immaterial to the financial statements. There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal 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 $ 1,500,000 aggregate for liability, $ 1,500,000 for automobile coverage, $ 500,000 faithful performance employee bonding and $ 1,000,000 for universal umbrella coverage. Property coverage is at I approximately $ 91,000,000. 1 1 62 1 1 ' CITY OF SHAKOPEE Scott County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2009 NOTE 12 — DEFINED BENEFIT PENSION PLANS — STATEWIDE Public Employees' Retirement Association A. Plan Description 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 or Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police officers, firefighters and peace officers who qualify for membership by statute are covered by the PEPFF. ' PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by state statute and vest after 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. Two methods are used to compute benefits for PERA's Coordinated and Basic Plan members. The retiring member receives the higher of a step -rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2% of average salary for each of the first 10 years of service and 2.7% for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2% of average salary for each of the first 10 years and 1.7% for each remaining year. Under Method 2, the annuity accrual rate is 2.7% of average salary for Basic Plan members and 1.7% for Coordinated Plan members for each year of service. For PEPFF members, the annuity accrual rate is 3.0% for each year of service. For all PERF and PEPFF members hired prior to July 1, 1989, whose annuity is calculated using Method 1, a full annuity is available when age plus years of service equal 90. Normal retirement age is 55 for PEPFF members and 65 for Basic and Coordinated Plan members hired prior to July 1, 1989. Normal retirement age is the age for unreduced Social Security benefits capped at 66 for Coordinated Plan members hired on or after July 1, 1989. A 1 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 of the retiree — no survivor annuity is payable. There are also various types of joint and survivor annuity options available which will be payable over joint lives. Members may also leave their contributions in the Fund upon termination of public service in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin. 1 63 1 CITY OF SHAKOPEE , Scott County, Minnesota NOTES TO THE FINANCIAL STATEMENTS 1 December 31, 2009 NOTE 12 — DEFINED BENEFIT PENSION PLANS — STATEWIDE Public Employees' Retirement Association (Continued) 1 A. Plan Description (Continued) The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active Plan participants. Vested, terminated employees who are entitled to benefits but are not yet receiving them are bound by the provisions in effect at the time they last terminated their public service. PERA issues a publicly available financial report that includes financial statements and required supplementary information for PERF and PEPFF. That report may be obtained on the Internet at www.mnpera.org, by writing to PERA at 60 Empire Drive, #200, St. Paul, Minnesota 55103- 2088 or by calling (651) 296 -7460 or (800) 652 -9026. B. Funding Policy Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These 1 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 Coordinated Plan members were required to contribute 6.0% of their annual covered salary in 2009. PEPFF members were required to contribute 9.4% of their annual covered salary in 2009. The City is required to contribute the following percentages of annual covered payroll: 6.75% for Coordinated Plan PERF members and 14.1% for PEPFF members. Employer contribution rates for the Coordinated Plan will increase to 7.0% effective January 1, 2010. The City's contributions to the PERF for the years ending December 31, 2009, 2008 and 2007 were $ 516,529, $ 481,929 and $ 451,428, respectively. The City's contributions to the PEPFF for the years ending December 31, 2009, 2008 and 2007 were $ 484,519, $ 415,440 and $ 359,836, respectively. The City's contributions were equal to the contractually required contributions for each year as set by state statute. NOTE 13 — DEFINED CONTRIBUTION PLAN — STATE -WIDE Four Council Members of the City are covered by the Public Employees' Defined Contribution 1 Plan ( PEDCP), a multiple - employer deferred compensation plan administered by PERA. The PEDCP is a tax qualified plan under Section 401(a) of the Internal Revenue Code and all contributions by or on behalf of employees are tax deferred until time of withdrawal. 1 1 1 64 1 1 CITY OF SHAKOPEE Scott County, Minnesota NOTES TO THE FINANCIAL STATEMENTS December 31, 2009 NOTE 13 — DEFINED CONTRIBUTION PLAN — STATE -WIDE Plan benefits depend solely on amounts contributed to the plan plus investment earnings, less administrative expenses. Minnesota Statutes Chapter 353D.03 specifies the employee and employer contribution rates for those qualified personnel who elect to participate. An eligible elected official who decides to participate contributes 5% of salary which is matched by the elected official's employer. Employer and employee contributions are combined and used to purchase shares in one or more of the seven accounts of the Minnesota Supplemental Investment Fund. For administering the plan, PERA receives 2% of employer contributions and four- tenths of 1% of the assets in each member's account annually. Total contributions made by the City during fiscal year 2009 were: Contribution Amount Percentage of Covered Payroll Required Employee Employer Employee Employer Rates $ 1,400 $ 1,400 5% 5% 5% 1 NOTE 14 — DEFINED BENEFIT PENSION PLAN — SHAKOPEE VOLUNTEER FIRE RELIEF ASSOCIATION 1 A. Plan Description The Shakopee Fire Relief Association (the "Association ") is the administrator of a single employer defined benefit pension plan established to provide benefits for members of the Shakopee Fire Department. The Association provides retirement and disability benefits to members, and benefits to survivors upon the death of eligible members. Benefits are established in accordance with Minnesota Statutes. The defined retirement benefits are based on a member's years of service. Benefit provisions can be amended by the Association within the parameters provided by Minnesota Statutes. The Association issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to Shakopee Fire Relief Association, 129 Holmes Street South, Shakopee, Minnesota 55379. 1 1 1 65 1 CITY OF SHAKOPEE 1 Scott County, Minnesota NOTES TO THE FINANCIAL STATEMENTS 1 December 31, 2009 NOTE 14 — DEFINED BENEFIT PENSION PLAN — SHAKOPEE VOLUNTEER FIRE RELIEF ASSOCIATION B. Funding Policy 1 Minnesota Statutes Chapter 69.772 specifies minimum support rates required on an annual basis. The minimum support rates from the municipality and from state aid are determined as the amount required to meet the normal cost plus amortizing any existing prior service costs over a 10 year period. Actuarial valuations are not required for the Association as the Association follows Minnesota Statutes for the valuation calculation. The City has decided to make an annual contribution in addition to state aid received for pension cost. The Association is comprised of volunteers; therefore, there are no payroll expenditures (i.e., there are no covered payroll percentage calculations). Contributions totaling $ 397,029 ($ 224,770 City of Shakopee and $ 172,259 State of Minnesota) were made in accordance with contribution requirements as of December 31, 2009. These r contributions were entirely for normal service cost. The City's annual pension cost for the current year and related information is as follows: 1 Valuation Date December 31, 2009 Actuarial Cost Method Entry Age Normal 1 Amortization Method Level annual dollar closed Remaining Amortization Period: Normal Cost 20 years Prior Service Cost 10 years Asset Valuation Method Market Actuarial Assumptions: I Investment Rate of Return 5% Projected Salary Increases N/A Includes Inflation at N/A I Cost of Living Adjustments None Annual Percentage Net 1 Pension of APC Pension Year Ended Cost (APC) Contributed Obligation 1 12/31/07 $ 210,276 100% $ - 12/31/08 187,451 100% - 1 12/31/09 240,169 100% - 1 66 1 1 1 CITY OF SHAKOPEE Scott County, Minnesota I ' NOTES TO THE FINANCIAL STATEMENTS December 31, 2009 I NOTE 14 — DEFINED BENEFIT PENSION PLAN — SHAKOPEE VOLUNTEER FIRE RELIEF ASSOCIATION 1 B. Funding Policy (Continued) I Statutory Statutory Funded Valuation Value of Accrued (Unfunded) Funded Date Assets Liability (SAL) SAL Ratio I 12/31/04 $ 2,649,514 $ 3,916,348 $ (1,266,834) 67.7% 12/31/05 3,100,221 4,659,785 (1,559,564) 66.5% 1 12/31/06 3,299,363 4,338,056 (1,038,693) 76.1% 12/31/07 3,621,115 4,445,673 (824,558) 81.5% 12/31/08 2,944,948 4,810,784 (1,865,836) 61.2% 1 12/31/09 3,190,043 4,364,302 (1,174,259) 73.1% The Association is comprised of volunteers; therefore, there are no payroll expenditures (i.e., I there are no covered payroll amounts or percentage calculations). NOTE 15 — POST EMPLOYMENT HEALTH BENEFITS PLAN 1 A. Plan Description I The City provides a single- employer defined benefit health care plan to eligible retirees and their spouses. The plan offers medical coverage administered by Medica. It is the City's policy to periodically review its medical coverage and to obtain requests for proposals in order to provide I the most favorable benefits and premiums for City employees and retirees. B. Funding Policy 1 Retirees and their spouses contribute to the health care plan at the same rate as City employees. This results in the retirees receiving an implicit rate subsidy. Contribution requirements are I established by the City, based on the contract terms with Medica. The required contributions are based on projected pay -as- you -go financing requirements. For fiscal year 2009, the City contributed $ 54,644 to the plan. As of January 1, 2009, there were 10 retirees receiving health benefits from the City's health plan. 1 1 1 67 1 CITY OF SHAKOPEE 1 Scott County, Minnesota NOTES TO THE FINANCIAL STATEMENTS 1 December 31, 2009 NOTE 15 — POST EMPLOYMENT HEALTH BENEFITS PLAN C. Annual OPEB Cost and Net OPEB Obligation 1 The City's annual OPEB cost (expense) is calculated based on the annual required contribution (ARC) of the City, an amount actuarially determined in accordance with the parameters of GASB I Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. The following table shows the components of the City's annual OPEB cost of the year, the amount actually contributed to the plan, and changes in the City's net OPEB obligation to the plan. ARC $ 254,464 1 Interest on Net OPEB Obligation 9,622 Adjustment to ARC (13,911) Annual OPEB Cost (Expense) 250,175 Contribution Made 54,644 Increase in Net OPEB Obligation 195,531 Net OPEB Obligation - Beginning of Year 240,553 Net OPEB Obligation - End of Year $ 436,084 1 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligation for 2009 was as follows: 1 Percentage of Fiscal Year Annual OPEB Employer Annual OPEB Net OPEB 1 End Cost Contribution Cost Contributed Obligation 12/31/09 $ 250,175 $ 54,644 22% $ 436,084 1 12/31/08 240,553 - 0% 240,553 D. Funded Status and Funding Progress I As of January 1, 2007, the most recent actuarial valuation date, the City had no assets deposited to fund the plan. The actuarial accrued liability for benefits was $ 1,887,961 and the actuarial value of assets was $ 0, resulting in an unfunded actuarial accrued liability (UAAL) of $ 1,887,961. The covered payroll (annual payroll of active employees covered by the plan) was $ 6,652,669 and the ratio of the UAAL to the covered payroll was 28.4 %. 68 1 1 1 CITY OF SHAKOPEE Scott County, Minnesota 1 NOTES TO THE FINANCIAL STATEMENTS December 31, 2009 1 NOTE 15 — POST EMPLOYMENT HEALTH BENEFITS PLAN I D. Funded Status and Funding Progress (Continued) Actuarial valuations involve estimates of the value of reported amounts and assumptions about I the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality and the health care cost trend. Amounts determined regarding the funded status of the plan and the ARC of the employer are subject to continual revision as actual I results are compared with past expectations and new estimates are made about the future. The Schedule of Funding Progress — Other Post Employment Benefits, presented as required I supplementary information following the Notes to the Financial Statements, presents multi -year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. 1 E. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the I plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions I used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities, consistent with the long -term perspective of the calculations. In the January 1, 2007 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions included a 4.0 % discount rate, which is based on the investment yield expected to finance benefits depending on whether the plan is funded in a I separate trust (about 7% to 8.5 %, long -term, similar to a pension plan) or unfunded (3.5% to 5 %, shorter -term, based on City's general assets). The City currently does not plan to prefund for this benefit. At the actuarial valuation date, the annual health care cost trend rate was calculated to be 9% initially, reduced incrementally to an ultimate rate of 5% after 5 years. The UAAL is being 1 amortized as a level percentage of payroll. The remaining amortization period at January 1, 2007 was 30 years. 1 NOTE 16 — SEGMENT INFORMATION The City maintains four enterprise funds that account for the electric, water, sewer and storm I drainage utilities. The City considers each of its enterprise funds to be a segment. Since the required segment information is already included in the City's proprietary funds' Balance Sheet and Statement of Revenues, Expenses and Changes in Fund Net Assets balances, this I information has not been repeated in the Notes to the Financial Statements. 1 69 1 1 CITY OF SHAKOPEE 1 Scott County, Minnesota NOTES TO THE FINANCIAL STATEMENTS 1 December 31, 2009 NOTE 17 — PRIOR PERIOD ADJUSTMENT A prior period adjustment was needed to correct the 2008 ending accumulated depreciation balance in the Water Fund. The $ 1,287,585 adjustment increased beginning net assets. NOTE 18 — SUBSEQUENT EVENT On February 3, 2010, the City approved an agreement with the State of Minnesota and Scott County to acquire land to be used for storm ponds, parks and a fire station in exchange for land currently owned by the City and an additional $ 520,883. This will be paid out of the Storm Drainage Fund. 1 1 1 1 1 1 1 1 1 1 1 70 1 1 1 1 1 1 1 1 1 REQUIRED SUPPLEMENTARY INFORMATION 1 1 1 1 1 1 1 1 1 71 1 CITY OF SHAKOPEE Scott County, Minnesota 1 SCHEDULE OF FUNDING PROGRESS - OTHER POST EMPLOYMENT BENEFITS December 31, 2009 1 Actuarial UAAL as a Actuarial Accrued Liability Unfunded Percentage of Actuarial Value of (AAL) - AAL Funded Covered Covered Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll Date (a) (b) (b -a) (a/b) (c) ((b -a) /c) 01/01/08 * $ - $ 1,887,961 $ 1,887,961 0.0% $ 6,652,669 28.4% 01/01/09 ** - 1,887,961 1,887,961 0.0% 6,652,669 28.4% * This Schedule was implemented in 2008 and, therefore, contains only two years of data. 1 See Note 15 in the Notes to the Financial Statements for more details on this Schedule. ** Because an actuarial valuation is being performed once every three years, the amounts for the 01/01/08 and 01/01/09 valuation are the same. 1 1 1 1 1 1 1 1 1 72 1 1 1 1 1 1 1 1 1 1 1 NONMAJOR FUNDS 1 1 1 1 1 1 1 1 1 CITY OF SHAKOPEE Scott County, Minnesota COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS 1 December 31, 2009 (Continued) I Special Revenue 1 Forfeiture Transit Telecommunication SCDP Grant 1 ASSETS: Cash and Investments $ 116,058 $ 1,825,131 $ 43,888 $ 75,141 Taxes Receivable - Delinquent - - - - Special Assessments Receivable: Delinquent - - - - Deferred - - - - Accounts Receivable 21 55,260 8,554 - Interest Receivable 817 14,466 - 542 Notes Receivable - - - - Total Assets $ 116,896 $ 1,894,857 $ 52,442 $ 75,683 LIABILITIES AND FUND BALANCES: 1 Liabilities: Accounts Payable $ 9,105 $ 187,760 $ - $ - Contracts Payable - - - - Due to Other Funds - - - - Advances from Other Funds - - - - Due to Other Governments - - - - Deferred Revenue - - - - Total Liabilities 9,105 187,760 - - Fund Balances: Reserved for: Special Revenue 107,791 1,707,097 52,442 75,683 Capital Projects - - - - Unreserved, Reported in: Debt Service - Undesignated - - - - 1 Capital Projects - Undesignated - - - - Total Fund Balances 107,791 1,707,097 52,442 75,683 I Total Liabilities and Fund Balances $ 116,896 $ 1,894,857 $ 52,442 $ 75,683 1 74 I 1 1 1 1 Special Revenue Debt Service I Economic 1998B 2000A 2002A Revolving Development Improvement Improvement Improvement I Loan Authority Total Bonds Bonds Bonds $ 200,052 $ 494,669 $ 2,754,939 $ 210,288 $ 348,311 $ 408,246 I 1,821 1,821 - - - - - - 880 - - • - - - 3,109 91,321 61,723 144 63,979 1,450 3,333 20,608 815 1,901 1,800 I 151,873 - 151,873 - - - $ 353,375 $ 499,967 $ 2,993,220 $ 215,092 $ 441,533 $ 471,769 I $ - $ 281 $ 197,146 $ 274 $ 274 $ 274 1 116,963 - 116,963 - - - 1,821 1,821 3,989 91,321 61,723 I 116,963 2,102 315,930 4,263 91,595 61,997 II 236,412 497,865 2,677,290 - - - I - - - 210,829 349,938 409,772 II 236,412 497,865 2,677,290 210,829 349,938 409,772 I $ 353,375 $ 499,967 $ 2,993,220 $ 215,092 $ 441,533 $ 471,769 1 75 I 1 CITY OF SHAKOPEE Scott County, Minnesota COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS 1 December 31, 2009 (Continued) I Debt Service 2002B 2003A 2004B 2004C Improvement Improvement Refunding Improvement Bonds Bonds Bonds Bonds ASSETS: Cash and Investments $ 819,059 $ 405,301 $ 370,911 $ 914,730 Taxes Receivable Delinquent - - 5,223 - Special Assessments Receivable: Delinquent - - - - Deferred 744,660 342,723 - 606,708 Accounts Receivable - - Interest Receivable 4,732 3,026 1,769 5,464 Notes Receivable - - - - II Total Assets $ 1,568,451 $ 751,050 $ 377,903 $ 1,526,902 LIABILITIES AND FUND BALANCES: 1 Liabilities: Accounts Payable $ 274 $ 274 $ 274 $ 14,544 Contracts Payable - - - - Due to Other Funds - - - - Advances from Other Funds - - - - Due to Other Governments - - - - Deferred Revenue 744,660 342,723 5,223 606,708 Total Liabilities 744,934 342,997 5,497 621,252 I Fund Balances: Reserved for: Special Revenue - - - - Capital Projects - - - - Unreserved, Reported in: I Debt Service - Undesignated 823,517 408,053 372,406 905,650 Capital Projects - Undesignated - - - - Total Fund Balances 823,517 408,053 372,406 905,650 Total Liabilities and Fund Balances $ 1,568,451 $ 751,050 $ 377,903 $ 1,526,902 1 76 I 1 1 1 1 Debt Service 1 2004D 2006A 2007A 2007B 2008A 2010A Building Improvement Improvement Improvement Improvement Improvement Bonds Bonds Bonds Bonds Bonds Bonds Total I $ 458,040 $ 1,545,028 $ 157,470 $ 625,152 $ 476,381 $ - 6,738,917 - - 5,223 I - 2,630 8,745 - 28,139 - 40,394 1 - 357,581 1,017,007 104,278 741,552 254,178 4,324,840 1,157 6,689 724 4,442 2,483 - 35,002 III $ 459,197 $ 1,911,928 $ 1,183,946 $ 733,872 $ 1,248,555 $ 254,178 $ 11,144,376 1 1 $ 3,926 $ 274 $ 274 $ 274 $ 274 $ - $ 21,210 360,211 1,025,752 104,278 769,691 254,178 4,370,457 1 3,926 360,485 1,026,026 104,552 769,965 254,178 4,391,667 1 - - - - - - - 1 455,271 1,551,443 157,920 629,320 478,590 - 6,752,709 1 455,271 1,551,443 157,920 629,320 478,590 - 6,752,709 1 $ 459,197 $ 1,911,928 $ 1,183,946 $ 733,872 $ 1,248,555 $ 254,178 $ 11,144,376 1 77 1 1 CITY OF SHAKOPEE Scott County, Minnesota 1 COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS 1 December 31, 2009 (Continued) 1 Capital Projects 1 Capital East Dean's State Aid Park Reserve Improvements Lake 1 ASSETS: Cash and Investments $ 4,337,295 $ 233,635 $ 3,590,804 $ 379,731 Taxes Receivable - Delinquent - - - - 1 Special Assessments Receivable: Delinquent - - 884 - Deferred - - 643,544 - Accounts Receivable - - - - 1 Interest Receivable 33,754 5,221 27,134 2,811 Notes Receivable - Total Assets - - - 4 371 049 238 856 1 $ $ $ 4,262,366 $ 382,542 LIABILITIES AND FUND BALANCES: 1 Liabilities: Accounts Payable $ - $ 1,844 $ 1,249 $ - 1 Contracts Payable - - - - Due to Other Funds - - - _ Advances from Other Funds - 1,505,000 - - Due to Other Governments - - - _ Deferred Revenue - - 644,428 - Total Liabilities - 1,506,844 645,677 - Fund Balances: Reserved for: 1 Special Revenue - - - Capital Projects - - 3,616,689 382,542 Unreserved, Reported in: 1 Debt Service - Undesignated - - - - Capital Projects - Undesignated 4,371,049 (1,267,988) - - Total Fund Balances 4,371,049 (1,267,988) 3,616,689 382,542 1 Total Liabilities and Fund Balances $ 4,371,049 $ 238,856 $ 4,262,366 $ 382,542 1 1 78 1 1 1 1 1 Capital Projects I Total Governmental I 2008 Projects 2009 Projects 2010 Projects Total Funds $ 184,182 $ 2,452 $ 809 $ 8,728,908 $ 18,222,764 1 - - - - 7,044 - - - 884 41,278 I - - - 643,544 4,968,384 - 63,979 1,646 - - 70,566 126,176 i - - - - 151,873 $ 185,828 $ 2,452 $ 809 $ 9,443,902 $ 23,581,498 1 I $ - $ 28,552 24,212 175 31,820 250,176 24,212 24,212 - 560,000 40,000 600,000 600,000 I - - - 1,505,000 1,505,000 - 116,963 - 644,428 5,016,706 I - 612,764 40,175 2,805,460 7,513,057 1 - - - - 2,677,290 185,828 - - 4,185,059 4,185,059 1 - - - - 6,752,709 (610,312) (39,366) 2,453,383 2,453,383 1 185,828 (610,312) (39,366) 6,638,442 16,068,441 $ 185,828 $ 2,452 $ 809 $ 9,443,902 $ 23,581,498 1 79 1 1 CITY OF SHAKOPEE 1 Scott County, Minnesota COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS I For the Year Ended December 31, 2009 (Continued) Special Revenue I Revolving I Forfeiture Transit Telecommunication SCDP Grant Loan REVENUES: Property Taxes $ - $ - $ - $ - $ - I Tax Increments - - - Special Assessments - - - - - Licenses and Permits - - 348,767 - - Intergovernmental: I State Grants - 863,760 - - - Other Grants and Aids - - - - - Charges for Services - 29,993 - - - I Fines and Forfeitures 63,767 - - - - Miscellaneous: Investment Income 3,742 62,944 28,657 2,426 10,438 Contributions and Donations - - - - - I Other 11,196 - 505 3,800 - Total Revenues 78,705 956,697 377,929 6,226 10,438 EXPENDITURES: Current: General Government - - 185,203 - - Public Safety 88,564 - - - - ' Public Works - 1,113,458 - - - Culture and Recreation - - - - - Economic Development - - - - - Debt Service: Principal - - - - - Interest and Other Charges - - - - 2,875 Capital Outlay - - 13,385 - - I Total Expenditures 88,564 1,113,458 198,588 - 2,875 Excess of Revenues Over I (Under) Expenditures (9,859) (156,761) 179,341 6,226 7,563 OTHER FINANCING SOURCES (USES): Transfers In - - - - 1 Transfers Out - (11,200) (916,541) - - Total Other Financing Sources (Uses) (11,200) (916,541) - Net Change in Fund Balances (9,859) (167,961) (737,200) 6,226 7,563 I FUND BALANCES: Beginning of Year 117,650 1,875,058 789,642 69,457 228,849 I End of Year $ 107,791 $ 1,707,097 $ 52,442 $ 75,683 $ 236,412 1 80 1 1 1 1 1 Special Revenue Debt Service Economic 1997B 1998B 2000A 2002A 2002B I Development Improvement Improvement Improvement Improvement Improvement Authority Recreation Total Bonds Bonds Bonds Bonds Bonds I $ 81,050 $ - $ 81,050 $ 35,000 $ 61,699 $ 56,349 $ 98,254 $ - 298 298 - - - 48,349 105,872 35,493 321,301 - - 348,767 - - - - - II - - 863,760 - - - - - 33,713 - 33,713 - - - - - - 974,336 1,004,329 - - - - II 63,767 15,236 35,101 158,544 - 1,518 6,131 7,064 21,052 7 6,571 22,079 - - - - 130,304 1,016,008 2,576,307 35,000 111,566 168,352 140,811 342,353 1 - - 185,203 - - - - - ' _ = 88,564 1,113,458 = - - - - - - 2,165,676 2,165,676 - - - - - 93,854 - 93,854 - - - - - I 70,000 195,000 240,000 130,000 210,000 - - 2,875 1,863 15,721 29,447 20,674 36,311 1 - 10,355 23,740 - - - - - 93,854 2,176,031 3,673,370 71,863 210,721 269,447 150,674 246,311 1 36,450 (1,160,023) (1,097,063) (36,863) (99,155) (101,095) (9,863) 96,042 I 32,720 1,204,160 1,236,880 - 35,000 - 74,208 - (19,200) (384,947) (1,331,888) (35,000) - 13,520 819,213 (95,008) (35,000) 35,000 - 74,208 - I 49,970 (340,810) (1,192,071) (71,863) (64,155) (101,095) 64,345 96,042 I 447,895 340,810 3,869,361 71,863 274,984 451,033 345,427 727,475 $ 497,865 $ - $ 2,677,290 $ $ 210,829 $ 349,938 $ 409,772 $ 823,517 1 81 I 1 CITY OF SHAKOPEE Scott County, Minnesota 1 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS I For the Year Ended December 31, 2009 (Continued) Debt Service 1 2003A 2004B 2004C 2004D Improvement Refunding Improvement Building I Bonds Bonds Bonds Bonds REVENUES: Property Taxes $ - $ 248,702 $ 143,855 $ - I Tax Increments - _ - - Special Assessments 21,372 - 122,910 - Licenses and Permits - - - - Intergovernmental: - I State Grants - - Other Grants and Aids - - - - Charges for Services - - - Fines and Forfeitures - - - - - I Miscellaneous: Investment Income 10,614 7,118 22,621 2,802 Contributions and Donations - _ - - I Other - - Total Revenues 31,986 255,820 289,386 2,802 EXPENDITURES: Current: General Government - - - - Public Safety _ - - - I Public Works _ - - Culture and Recreation - - _ Economic Development - - - - Debt Service: I Principal 130,000 175,000 250,000 235,000 Interest and Other Charges 25,332 65,736 73,386 210,453 Capital Outlay - - - _ Total Expenditures 155,332 240,736 323,386 445,453 Excess of Revenues Over (Under) Expenditures (123,346) 15,084 (34,000) (442,651) OTHER FINANCING SOURCES (USES): Transfers In - - - 415,497 I Transfers Out - - - - Total Other Financing Sources (Uses) - - - 415,497 Net Change in Fund Balances (123,346) 15,084 (34,000) (27,154) FUND BALANCES: Beginning of Year 531,399 357,322 939,650 482,425 I End of Year $ 408,053 $ 372,406 $ 905,650 $ 455,271 1 82 1 1 1 1 1 Debt Service Capital Projects 2006A 2007A 2007B 2008A I Improvement Improvement Improvement Improvement Capital Bonds Bonds Bonds Bonds Total State Aid Park Reserve Improvements I $ 346,840 $ 10,173 $ 153 $ - $ 1,001,025 $ - $ - $ - 115,353 144,882 26,198 259,951 1,201,681 - - 169,622 I - _ - � - 21,360 - 111 320,548 i - - - - - - - 27,922 3,103 14,533 14,914 139,392 163,732 (801) 119,204 I - _ _ - 440,900 - 1,787 490,115 158,158 40,884 274,865 2,342,098 484,280 463,246 288,826 1 - - - - - - - - 315,000 110,000 120,000 - 2,180,000 - - - 119,749 49,048 56,166 75,052 778,938 - 82,500 - 1 - - - 39,315 311,093 434,749 159,048 176,166 75,052 2,958,938 121,815 311,093 1 55,366 (890) (135,282) 199,813 (616,840) 484,280 341,431 (22,267) 1 342,736 - _ - 867,441 - - (35,000) (441,388) - - 342,736 - - - 832,441 (441,388) - - 1 398,102 (890) (135,282) 199,813 215,601 42,892 341,431 (22,267) 1 1,153,341 158,810 764,602 278,777 6,537,108 4,328,157 (1,609,419) 3,638,956 $ 1,551,443 $ 157,920 $ 629,320 $ 478,590 $ 6,752,709 $ 4,371,049 $ (1,267,988) $ 3,616,689 1 83 1 CITY OF SHAKOPEE 1 Scott County, Minnesota COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS I For the Year Ended December 31, 2009 (Continued) Capital Projects I East Dean's I TIF No. 10 Lake TIT No. 12 2008 Projects TIF No. 13 REVENUES: Property Taxes $ - $ - $ _ $ - $ - I Tax Increments 39,043 - 85,810 - 26,805 Special Assessments - - - - - Licenses and Permits - - - - - Intergovernmental: - I State Grants - - - Other Grants and Aids - - - - - Charges for Services - - - - - Fines and Forfeitures - - - - Miscellaneous: Investment Income - 12,505 - 12,908 - Contributions and Donations - - - - - I Other - - - - Total Revenues 39,043 12,505 85,810 12,908 26,805 EXPENDITURES: I Current: General Government - - - - - Public Safety - - - - - Public Works - - - Culture and Recreation - - - - - Economic Development 39,043 - 84,239 - 24,124 I Debt Service: Principal - - - - - Interest and Other Charges - - - - - Capital Outlay - - 2,326 - Total Expenditures 39,043 - 84,239 2,326 24,124 Excess of Revenues Over (Under) Expenditures - 12,505 1,571 10,582 2,681 OTHER FINANCING SOURCES (USES): Transfers In - - - - - I Transfers Out - - (1,571) - (2,681) Total Other Financing Sources (Uses) - - (1,571) - (2,681) Net Change in Fund Balances - 12,505 - 10,582 - 1 FUND BALANCES: Beginning of Year - 370,037 - 175,246 - 1 End of Year $ - $ 382,542 $ - $ 185,828 $ - 1 84 I 1 1 1 1 Capital Projects Total Other I Governmental 2009 Projects 2010 Projects Total Funds I $ _ $ $ - $ 1,082,075 151,658 151,956 135,633 - 305,255 1,506,936 - - 21,360 370,127 I - - 320,548 1,184,308 - - - 33,713 1 _ - - 1,004,329 - 63,767 (1,864) - 305,684 603,620 I - _ 440,900 4,227 440,900 2,440 26,306 136,209 - 1,549,632 6,468,037 1 - - - 185,203 _ - = 88,564 1,113,458 - - - 2,165,676 I - - 147,406 241,260 - - 2,180,000 18,343 - 100,843 882,656 I 1,298,963 1,317,306 39,366 1,691,063 1,714,803 39,366 1,939,312 8,571,620 1 (1,181,097) (39,366) (389,680) (2,103,583) 1 605,510 _ 605,510 2,709,831 (445,640) (1,812,528) 605,510 - 159,870 897,303 1 (575,587) (39,366) (229,810) (1,206,280) 1 (34,725) - 6,868,252 17,274,721 $ (610,312) $ (39,366) $ 6,638,442 $ 16,068,441 1 85 i 1 CITY OF SHAKOPEE Scott County, Minnesota SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - TRANSIT FUND For the Year Ended December 31, 2009 1 Variance with I Original and Actual Final Budget - Final Amounts Amounts Over (Under) REVENUES: Intergovernmental Revenue: State Grants $ 1,025,000 $ 863,760 $ (161,240) Charges for Services 30,000 29,993 (7) Miscellaneous Revenues: Investment Income 30,000 62,944 32,944 I Total Revenues 1,085,000 956,697 (128,303) EXPENDITURES: Public Works: Current 1,173,500 1,113,458 (60,042) Excess of Revenues Under Expenditures (88,500) (156,761) (68,261) OTHER FINANCING USES: Transfers Out (11,200) (11,200) - 1 Net Change in Fund Balance $ (99,700) (167,961) $ (68,261) FUND BALANCE: Beginning of Year 1,875,058 End of Year $ 1,707,097 1 1 1 86 1 1 1 CITY OF SHAKOPEE Scott County, Minnesota I SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - TELECOMMUNICATION FUND For the Year Ended December 31, 2009 I Budgeted Amounts Variance with Actual Final Budget - Original Final Amounts Over (Under) I REVENUES: Licenses and Permits $ 328,000 $ 328,000 $ 348,767 $ 20,767 Miscellaneous Revenues: 1 Investment Income 25,000 25,000 28,657 3,657 Other - - 505 505 I Total Revenues 353,000 353,000 377,929 24,929 EXPENDITURES: I General Government: Current 213,670 213,670 185,203 (28,467) Capital Outlay 12,000 12,000 13,385 1,385 I Total Expenditures 225,670 225,670 198,588 (27,082) Excess of Revenues Over 1 Expenditures 127,330 127,330 179,341 52,011 OTHER FINANCING USES: 1 Transfers Out (106,500) (924,500) (916,541) 7,959 Net Change in Fund Balance $ 20,830 $ (797,170) (737,200) $ 59,970 I FUND BALANCE: in Beginning of Year 789,642 II End of Year $ 52,442 1 1 1 1 i 87 1 CITY OF SHAKOPEE Scott County, Minnesota SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES I IN FUND BALANCE - BUDGET AND ACTUAL - ECONOMIC DEVELOPMENT AUTHORITY FUND For the Year Ended December 31, 2009 1 Variance with Original and Actual Final Budget - Final Amounts Amounts Over (Under) REVENUES: I Property Taxes $ 80,000 $ 81,050 $ 1,050 Tax Increments - 298 298 I Intergovernmental Revenue: Other Grants and Aids 33,000 33,713 713 Miscellaneous Revenues: Investment Income 16,000 15,236 (764) Other - 7 7 Total Revenues 129,000 130,304 1,304 1 EXPENDITURES: Economic Development: 1 Current 116,680 93,854 (22,826) Excess of Revenues Over Expenditures 12,320 36,450 24,130 OTHER FINANCING SOURCES (USES): 1 Transfers In 32,000 32,720 720 Transfers Out (19,200) (19,200) - 1 Total Other Financing Sources (Uses) 12,800 13,520 720 Net Change in Fund Balance $ 25,120 49,970 $ 24,850 1 FUND BALANCE: Beginning of Year 447,895 1 End of Year $ 497,865 1 1 1 88 1 CITY OF SHAKOPEE 1 Scott County, Minnesota I SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - RECREATION FUND 1 For the Year Ended December 31, 2009 Budgeted Amounts Variance with I Actual Final Budget - Original Final Amounts Over (Under) REVENUES: 1 Charges for Services $ 1,019,600 $ 1,043,600 $ 974,336 $ (69,264) Miscellaneous Revenues: I Investment Income 50,000 50,000 35,101 (14,899) Other 43,000 19,000 6,571 (12,429) Total Revenues 1,112,600 1,112,600 1,016,008 (96,592) 1 EXPENDITURES: Culture and Recreation: 1 Current 2,321,760 2,397,360 2,165,676 (231,684) Capital Outlay 10,000 10,000 10,355 355 Total Expenditures 2,331,760 2,407,360 2,176,031 (231,329) 1 Excess of Revenues Over (Under) Expenditures (1,219,160) (1,294,760) (1,160,023) 134,737 1 OTHER FINANCING SOURCES (USES): Transfers In 1,204,160 1,204,160 1,204,160 - 1 Transfers Out - (300,000) (384,947) (84,947) Total Other Financing I Sources (Uses) 1,204,160 904,160 819,213 (84,947) Net Change in Fund Balance $ (15,000) $ (390,600) (340,810) $ 49,790 I FUND BALANCE: Beginning of Year 340,810 I End of Year $ - 1 1 1 89 1 1 CITY OF SHAKOPEE Scott County, Minnesota 1 COMBINING STATEMENT OF FUND NET ASSETS - INTERNAL SERVICE FUNDS ' December 31, 2009 Governmental Activities - Internal Service Funds I Employee Equipment Buildings Park Assets Benefits Total ASSETS: I Current Assets: Cash and Cash Equivalents $ - $ - $ - $ 2,075,357 $ 2,075,357 Investments 5,634,383 3,509,433 195,974 - 9,339,790 Interest Receivable 39,523 17,524 1,187 14,318 72,552 1 Notes Receivable, Current Portion 80,000 - - - 80,000 Total Current Assets 5,753,906 3,526,957 197,161 2,089,675 11,567,699 Noncurrent Assets: Notes Receivable 365,000 - - - 365,000 Capital Assets: Buildings and System - 30,251,458 3,141,813 - 33,393,271 Machinery and Equipment 7,795,142 - 6,492,314 - 14,287,456 Total Cost 7,795,142 30,251,458 9,634,127 - 47,680,727 Less Accumulated Depreciation (3,332,990) (6,979,892) (1,895,607) - (12,208,489) 1 Net Capital Assets 4,462,152 23,271,566 7,738,520 - 35,472,238 Total Noncurrent Assets 4,827,152 23,271,566 7,738,520 - 35,837,238 Total Assets $10,581,058 $ 26,798,523 $ 7,935,681 $ 2,089,675 $ 47,404,937 LIABILITIES AND NET ASSETS: Current Liabilities: Accounts Payable $ 242,512 $ 30 $ - $ - $ 242,542 Current Compensated Absences - - - 735,000 735,000 Total Current Liabilities 242,512 30 - 735,000 977,542 Noncurrent Liabilities: 1 Compensated Absences - - - 827,320 827,320 Net OPEB Obligation - - - 420,884 420,884 Total Noncurrent Liabilities - - - 1,248,204 1,248,204 Total Liabilities 242,512 30 - 1,983,204 2,225,746 Net Assets: Invested in Capital Assets, Net of Related Debt 4,462,152 23,271,566 7,738,520 - 35,472,238 Unrestricted 5,876,394 3,526,927 197,161 106,471 9,706,953 Total Net Assets 10,338,546 26,798,493 7,935,681 106,471 45,179,191 Total Liabilities and Net Assets $10,581,058 $ 26,798,523 $ 7,935,681 $ 2,089,675 $ 47,404,937 1 1 1 1 90 1 1 CITY OF SHAKOPEE 111 Scott County, Minnesota COMBINING STATEMENT OF REVENUES, EXPENSES I AND CHANGES IN FUND NET ASSETS - INTERNAL SERVICE FUNDS For the Year Ended December 31, 2009 Governmental Activities - Internal Service Funds Employee 1 Equipment Buildings Park Assets Benefits Total OPERATING REVENUES: Rental Charges $ 856,164 $ 1,079,675 $ 78,120 $ - $ 2,013,959 I Other Charges - - - 868,469 868,469 Total Operating Revenues 856,164 1,079,675 78,120 868,469 2,882,428 I OPERATING EXPENSES: - Employee Benefits - - 936,400 936,400 Depreciation 529,978 785,197 372,993 - 1,688,168 Total Operating Expenses 529,978 785,197 372,993 936,400 2,624,568 I Operating Income (Loss) 326,186 294,478 (294,873) (67,931) 257,860 1 NONOPERATING REVENUES: Investment Income 218,355 78,899 7,174 68,062 372,490 Gain on Disposal of Assets 37,162 - - - 37,162 I Total Nonoperating Revenues 255,517 78,899 7,174 68,062 409,652 Income (Loss) before Capital Contributions and Transfers 581,703 373,377 (287,699) 131 667,512 I Capital Contributions - 7,742 23,396 - 31,138 Transfers In - 1,094,988 - - 1,094,988 I Transfers Out - (415,497) - - (415,497) Change in Net Assets 581,703 1,060,610 (264,303) 131 1,378,141 I NET ASSETS: Beginning of Year 9,756,843 25,737,883 8,199,984 106,340 43,801,050 1 End of Year $10,338,546 $ 26,798,493 $ 7,935,681 $ 106,471 $ 45,179,191 1 1 1 1 91 1 1 CITY OF SHAKOPEE Scott County, Minnesota 1 COMBINING STATEMENT OF CASH FLOWS - INTERNAL SERVICE FUNDS For the Year Ended December 31, 2009 Employee Equipment Buildings Park Assets Benefits Total CASH FLOWS - OPERATING ACTIVITIES: Receipts from Customers and Users $ 856,164 $ 1,079,675 $ 78,120 $ 868,469 $ 2,882,428 Payments to Employees - - - (621,115) (621,115) Net Cash Flows - Operating Activities 856,164 1,079,675 78,120 247,354 2,261,313 CASH FLOWS - NONCAPITAL FINANCING ACTIVITIES: I Transfer from Other Funds - 1,094,988 - - 1,094,988 Transfer to Other Funds - (415,497) - - (415,497) Net Cash Flows - Noncapital Financing Activities - 679,491 - - 679,491 1 CASH FLOWS - CAPITAL AND RELATED FINANCING ACTIVITIES: Proceeds from Disposal of Capital Assets 54,162 - - - 54,162 Acquisition of Capital Assets (386,869) (99,137) - - (486,006) Net Cash Fiows - Capital and Related Financing Activities (332,707) (99,137) - - (431,844) CASH FLOWS - INVESTING ACTIVITIES: I Purchases of Investments (853,572) (1,738,406) (84,377) - (2,676,355) Payment Received for Notes Receivable 115,000 - - - 115,000 Interest Received • 215,115 78,377 6,257 66,770 366,519 Net Cash Flows - Investing Activities (523,457) (1,660,029) (78,120) 66,770 (2,194,836) Net Change in Cash and Cash Equivalents - - - 314,124 314,124 III CASH AND CASH EQUIVALENTS: Beginning of Year - - - 1,761,233 1,761,233 End of Year $ - $ - $ - $ 2,075,357 $ 2,075,357 I RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH FLOWS - OPERATING ACTIVITIES: I Operating Income (Loss) $ 326,186 $ 294,478 $ (294,873) $ (67,931) $ 257,860 Adjustments to Reconcile Operating Income (Loss) to Net Cash Fiows - Operating Activities: Depreciation Expense 529,978 785,197 372,993 - 1,688,168 I Changes in: Compensated Absences Payable - - - 127,554 127,554 Net OPEB Obligation - - - 187,731 187,731 I Total Adjustments 529,978 785,197 372,993 315,285 2,003,453 Net Cash Flows - Operating Activities $ 856,164 $ 1,079,675 $ 78,120 $ 247,354 $ 2,261,313 NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES: Contributions of Capital Assets from the Municipality and Developers $ - $ 7,742 $ 23,396 $ - $ 31,138 Purchases of Capital Assets on Account 242,512 30 - - 242,542 1 92 I 1 CITY OF SHAKOPEE Scott County, Minnesota ' STATEMENT OF CHANGES IN ASSETS AND LIABILITIES - ESCROW AGENCY FUND For the Year Ended December 31, 2009 1 Balance at Balance at December 31, December 31, 2008 Additions Deductions 2009 ASSETS: I Current: Cash and Investments $ 1,293,136 $ 1,835,627 $ 1,400,393 $ 1,728,370 1 LIABILITIES: Accounts Payable $ 5,071 $ 1,237,834 $ 1,224,466 $ 18,440 111 Deposits Payable 1,288,065 1,771,888 1,350,023 1,709,930 Total Liabilities $ 1,293,136 $ 3,009,722 $ 2,574,489 $ 1,728,370 1 1 1 1 1 1 1 1 1 93 1 1 1 1 1 1 1 1 1 1 (THIS PAGE LEFT BLANK INTENTIONALLY) 1 1 1 1 1 1 1 1 1 94 1 I • • " , 1 SECTION III i - STATISTICAL SECTION , I 1 1 I 1 i 111 1 1 1 1 1 1 1 f 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 STATISTICAL SECTION 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 (THIS PAGE LEFT BLANK INTENTIONALLY) 1 1 1 1 1 1 1 1 1 96 1 CITY OF SHAKOPEE Scott County, Minnesota STATISTICAL SECTION December 31, 2009 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. 1 CONTENTS Page ' Financial Trends 99 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 106 Portrayed is information to help the reader assess the 1 City's most important local revenue source, the property tax. Debt Capacity 110 1 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 117 1 Shown are demographic and economic indicators to help the reader understand the environment within which the City's ' financial activities take place. Operating Information 120 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 1 and the activities it performs. Source: Unless noted otherwise, the information in these schedules is from the CAFR for the 1 relevant year. 1 1 97 1 1 1 1 1 1 1 1 1 (THIS PAGE LEFT BLANK INTENTIONALLY) 1 1 1 1 1 1 1 1 1 98 1 CITY OF SHAKOPEE I Scott County, Minnesota NET ASSETS BY COMPONENT Table 1 Years 2003 Through 2009 1 2003 2004 2005 2006 2007 2008 2009 Governmental Activities: Invested in Capital Assets, Net of I Related Debt $ 94,388,758 $ 90,281,410 $ 111,237,672 $ 119,661,761 $ 113,534,056 $ 112,909,793 $ 112,097,148 Restricted 15,231,314 29,731,412 21,638,112 12,998,982 13,081,337 21,915,945 16,518,865 Unrestricted 15,241,647 21,214,073 21,845,121 29,264,714 28,316,931 22,086,771 28,832,576 Total Governmental Activities I Net Assets $ 124,861,719 $ 141,226,895 $ 154,720,905 $ 161,925,457 $ 154,932,324 $ 156,912,509 $ 157,448,589 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 $ 115,124,238 $ 114,331,216 I Restricted 978,371 1,867,077 2,232,469 880,069 1,026,351 1,756,369 3,574,612 Unrestricted 38,234,063 37,354,576 41,291,469 42,400,797 46,169,289 49,366,581 55,595,594 Total Business -Type Activities Net Assets $ 120,937,698 $ 128,637,470 $ 142,664,911 $ 152,617,880 $ 161,741,858 $ 166,247,188 $ 173,501,422 I Primary Government: Invested in Capital Assets, Net of Related Debt $ 176,114,022 $ 179,697,227 $ 210,378,645 $ 228,998,775 $ 228,080,274 $ 228,034,031 $ 226,428,364 Restricted 16,209,685 31,598,489 23,870,581 13,879,051 14,107,688 23,672,314 20,093,477 I Unrestricted 53,475,710 58,568,649 63,136,590 71,665,511 74,486,220 71,453,352 84,428,170 Total Primary Government Net Assets $ 245,799,417 $ 269,864,365 $ 297,385,816 $ 314,543,337 $ 316,674,182 $ 323,159,697 $ 330,950,011 1 Note: The City began to report accrual information when it implemented GASB Statement No. 34 in fiscal year 2003. 1 . 1 1 1 1 1 1 1 1 99 1 1 CITY OF SHAKOPEE Scott County, Minnesota I Table 2 CHANGES IN NET ASSETS Years 2003 Through 2009 2003 2004 2005 2006 2007 2008 2009 1 EXPENSES: Governmental activities: General Government $ 2,761,210 $ 3,135,421 $ 2,563,526 $ 3,161,106 $ 3,543,980 $ 3,514,573 $ 3,388,268 Public Safety 4,995,127 5,461,190 6,190,689 6,856,485 8,301,075 8,346,104 8,528,413 Public Works 3,673,623 6,036,920 8,298,258 6,798,917 15,264,606 8,099,384 7,860,080 Economic Development 683,035 360,167 314,858 333,462 363,805 522,074 316,566 Culture and Recreation 894,321 2,150,765 3,664,944 4,653,240 5,323,087 3,637,527 3,859,670 Other 668,531 861,864 924,270 896,110 1,042,133 1,033,999 1,040,044 Total Governmental Activities Expenses 13,675,847 18,006,327 21,956,545 22,699,320 33,838,686 25,153,661 24,993,041 Business -Type Activities: Electric 17,634,004 19,820,900 23,378,764 29,169,297 34,710,974 36,186,676 30,140,842 I Water 2,337,860 2,723,003 2,460,977 2,949,990 3,332,132 3,461,261 3,316,102 Sewer 1,835,242 2,009,468 2,349,047 2,786,234 2,938,955 3,308,759 3,398,117 Storm 800,092 941,842 999,849 1,523,343 1,352,078 1,435,376 1,264,261 Recreation 1,552,524 - - - - - - Total Business -Type Activities Expenses 24,159,722 25,495,213 29,188,637 36,428,864 42,334,139 44,392,072 38,119,322 I Total Primary Government Expenses $ 37,835,569 $ 43,501,540 $ 51,145,182 $ 59,128,184 $ 76,172,825 $ 69,545,733 $ 63,112,363 PROGRAM REVENUES: Governmental activities: I Charges for Services: General Government $ 1,706,644 $ 3,591,641 $ 791,504 $ 714,105 $ 583,247 $ 606,259 $ 680,681 Public Safety 2,408,012 3,446,465 3,462,283 2,063,023 1,650,235 1,506,680 1,677,772 Public Works 3,691,149 4,534,285 2,668,728 2,986,495 2,615,402 2,354,276 1,342,173 Culture and Recreation 1,330,062 1,497,853 1,826,847 1,676,630 1,086,750 1,295,772 1,013,044 I Operating Grants and Contributions 2,622,953 4,303,581 3,646,605 1,653,238 1,943,805 1,660,191 1,485,124 Capital Grants and Contributions 11,009 - 8,666,283 6,116,366 2,463,129 1,825,124 1,241,884 Total Governmental Activities Program Revenues 11,769,829 17,373,825 21,062,250 15,209,857 10,342,568 9,248,302 7,440,678 Business -Type Activities: Charges for Services: Electric 19,733,990 22,161,542 27,425,921 31,906,714 37,407,565 38,732,701 34,272,099 Water 2,569,848 2,349,505 2,627,084 3,127,207 3,525,140 3,390,309 3,605,498 I Sewer 2,827,777 3,078,191 2,971,601 3,471,984 2,806,371 2,556,299 3,485,882 Storm 1,947,139 1,806,974 1,937,430 1,859,912 1,505,247 1,379,821 1,405,560 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 1,007,519 1,879,530 I Total Business -Type Activities Program Revenues 36,640,034 40,240,481 45,875,500 46,540,603 49,383,300 47,066,649 44,648,569 Total Primary Government Program Revenues $ 48,409,863 $ 57,614,306 $ 66,937,750 $ 61,750,460 $ 59,725,868 $ 56,314,951 $ 52,089,247 Net (Expense) Revenue: I Governmental Activities $ (1,906,018) $ (632,502) $ (894,295) $ (7,489,463) $ (23,496,118) $ (15,905,359) $ (17,552,363) Business -Type Activities 12,480,312 14,745,268 16,686,863 10,111,739 7,049,161 2,674,577 6,529,247 Total Primary Government Net Expense $ 10,574,294 $ 14,112,766 $ 15,792,568 $ 2,622,276 $ (16,446,957) $ (13,230,782) $ (11,023,116) I 1 1 1 1 100 I 1 I CITY OF SHAKOPEE Scott County, Minnesota Table 2 (Continued) CHANGES IN NET ASSETS I Years 2003 Through 2009 2003 2004 2005 2006 2007 2008 2009 GENERAL REVENUES AND OTHER I CHANGES IN NET ASSETS: Governmental Activities: Taxes: Property Taxes $ 7,995,002 $ 7,842,043 $ 9,341,977 $ 10,547,177 $ 12,767,354 $ 14,200,833 $ 14,676,518 Other Taxes 507,706 364,211 314,858 336,648 369,240 388,935 151,956 I Unrestricted Investment Earnings 550,705 740,612 951,795 1,661,257 2,232,717 1,941,335 1,323,230 Gain on Disposal of Assets 69,623 294,833 746,340 2,700 22,628 56,453 37,162 Enterprise Fund Reclassed to Special Revenue - 5,539,108 1,658,132 - - - - I Transfers 443,651 2,215,871 1,375,203 2,146,233 1,111,046 1,297,988 1,899,577 Total Governmental Activities 9,566,687 16,996,678 14,388,305 14,694,015 16,502,985 17,885,544 18,088,443 Business -Type Activities: Investment Eamings 942,040 709,483 870,714 1,973,715 3,185,863 3,128,741 1,336,979 I - Gain on Disposal of Assets 9,260 4 09,918 13,749 - Special Item (5,539,108) (1,658,132) - Transfers (443,651} (2,215,871) (1,375,203) (2,146,233) (1,111,046) (1,297,988) (1,899,577) Total Business -Type Activities 507,649 (7,045,496) (1,752,703) (158,769) 2,074,817 1,830,753 (562,598) Total Primary Government $ 10,074,336 $ 9,951,182 $ 12,635,602 $ 14,535,246 $ 18,577,802 $ 19,716,297 $ 17,525,845 1 Change in Net Assets: GovemmentActivities $ 7,660,669 $ 16,364,176 $ 13,494,010 $ 7,204,552 $ (6,993,133) $ 1,980,185 $ 536,080 Business -Type Activities 12,987,961 7,699,772 14,934,160 9,952,970 9,123,978 4,505,330 5,966,649 Total Primary Govemment $ 20,648,630 $ 24,063,948 $ 28,428,170 $ 17,157,522 $ 2,130,845 $ 6,485,515 $ 6,502,729 Note: The City began to report accrual information when it implemented GASB Statement No. 34 in fiscal year 2003. 1 1 1 1 1 1 1 1 1 1 101 1 CITY OF SHAKOPEE 1 Scott County, Minnesota FUND BALANCES - GOVERNMENTAL FUNDS Last Ten Fiscal Years 1 2000 2001 2002 2003 I General Fund: Reserved $ 200,000 $ - $ - $ 79,003 Unreserved 4,673,116 3,144,560 3,534,080 5,565,816 I Total General Fund $ 4,873,116 $ 3,144,560 $ 3,534,080 $ 5,644,819 All Other Governmental Funds I Reserved: Special Revenue Funds $ 680,537 $ 945,041 $ 1,456,237 $ 1,778,684 Debt Service Funds 9,321,002 8,502,950 7,653,349 6,369,303 Capital Projects Funds 6,959,298 4,547,275 6,818,306 7,088,887 Unreserved Special Revenue Funds - - - - I Debt Service Funds - - - - Capital Projects Funds (512,538) (24,624) (777,600) (705,537) Total all Other Governmental Funds $ 16,448,299 $ 13,970,642 $ 15,150,292 $ 14,531,337 1 1 1 1 1 1 1 1 1 102 1 1 Table 3 1 2004 2005 2006 2007 2008 2009 $ 13,586 $ 16,465 $ 1,490,157 $ 1,810,650 $ 1,126,074 $ 799,276 1 7,233,268 9,662,677 8,354,477 7,896,883 8,733,528 10,703,004 $ 7,246,854 $ 9,679,142 $ 9,844,634 $ 9,707,533 $ 9,859,602 $ 11,502,280 1 $ 2,232,061 $ 2,861,564 $ 3,386,721 $ 2,489,775 $ 2,738,909 $ 2,677,290 10,837,684 9,236,020 7,930,114 - - - 17,088,803 9,915,610 8,082,799 3,849,703 4,873,440 4,185,059 (4,971) _ - 993,555 1,130,452 - 7,941,439 7,658,289 7,504,770 (28,081) (1,833,937) (1,205,899) 1,673,762 1,994,812 2,453,383 $ 30,125,496 $ 20,179,257 $ 18,193,735 $ 16,948,234 $ 18,395,902 $ 16,820,502 1 1 1 1 1 1 1 1 1 103 1 1 CITY OF SHAKOPEE 1 Scott County, Minnesota CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS Last Ten Fiscal Years 111 2000 2001 2002 2003 REVENUES: Taxes $ 5,148,137 $ 6,069,719 $ 7,128,598 $ 7,991,699 Special Assessments 2,959,962 2,380,186 1,466,432 3,158,560 1 Licenses and Permits 2,517,470 3,159,222 3,814,646 4,748,457 Intergovernmental 2,234,040 1,627,879 5,230,607 2,612,877 Charges for Service 1,982,395 1,093,146 1,489,516 1,537,412 I Fines and Forfeits 172,017 230,085 253,348 275,583 Miscellaneous 1,892,997 1,386,351 1,656,828 605,947 Total Revenues 16,907,018 15,946,588 21,039,975 20,930,535 1 EXPENDITURES: General Government 2,458,342 2,770,732 3,186,072 3,192,768 1 Police 2,090,873 2,421,948 3,014,829 3,148,785 Fire 728,749 767,061 889,390 975,656 Protective Inspection 499,892 521,856 555,384 645,030 1 Public Works 1,907,102 2,019,943 2,258,903 2,221,004 Culture and Recreation 621,306 664,340 622,099 669,570 Economic Development - - - - I Miscellaneous 86,805 103,681 109,455 317,167 Debt Service: Principal 4,195,000 3,265,000 3,015,000 3,720,000 1 Interest and other charges 847,692 770,152 729,300 717,098 Capital Outlay 4,585,657 4,396,346 9,249,946 5,532,652 Total Expenditures 18,021,418 17,701,059 23,630,378 21,139,730 1 Excess of Revenues Under Expenditures (1,114,400) (1,754,471) (2,590,403) (209,195) OTHER FINANCING SOURCES (USES): Bonds Issued 2,550,892 - 4,938;612 2,215,567 1 Sale of Assets 102,517 13,680 9,644 41,761 Premium on Bonds Issued - - - - Refunded Bond Escrow - - 1 Transfers In 2,273,569 1,718,995 1,701,837 1,732,872 Transfers Out (3,086,736) (4,268,740) (2,490,520) (2,289,221) Total Other Financing Sources (Uses) 1,840,242 (2,536,065) 4,159,573 1,700,979 Net Change in Fund Balance $ 725,842 $ (4,290,536) $ 1,569,170 $ 1,491,784 1 Debt Service as a Percentage of Noncapital Expenditures 38% 30% 26% 28% 1 104 1 1 1 Table 4 1 1 2004 2005 2006 2007 2008 2009 $ 8,207,254 $ 9,621,721 $ 10,815,367 $ 13,084,595 $ 14,437,766 $ 14,992,051 1 3,175,161 2,564,470 1,751,871 2,301,560 1,879,974 1,810,511 4,173,804 4,444,491 2,675,935 1,378,570 1,221,939 1,492,746 4,162,581 3,646,605 2,877,245 2,540,584 2,702,993 1,811,668 1 2,382,405 2,455,171 2,290,996 2,089,375 2,209,269 1,808,865 288,492 322,579 422,850 501,228 442,626 428,662 766,614 1,159,536 1,979,419 2,322,755 2,028,529 1,503,722 I 23,156,311 24,214,573 22,813,683 24,218,667 24,923,096 23,848,225 1 3,486,029 3,120,544 3,149,717 3,479,925 3,517,957 3,331,193 3,698,352 4,159,724 4,842,268 5,562,945 5,818,091 6,038,687 1,141,700 1,194,610 1,481,327 1,833,876 1,857,482 1,796,134 I 690, 855,864 829,526 945,196 786,715 769,883 2,564,662 3,003,554 3,095,392 3,769,491 3,628,954 3,591,049 2,489,749 2,792,590 3,453,545 3,651,539 4,101,175 3,898,844 - - - - 522,074 316,566 1 1,775,000 701;976 1,845,000 3,055,000 3,110,000 3,280,000 2,660,000 1,106,324 1,195,618 1,025,868 1,077,711 1,077,325 7,432,575 14,058,508 10,650,449 7,288,033 3,300,942 1,797,299 23,980,963 32,136,718 31,425,856 30,666,873 27,891,101 25,276,980 1 (824,652) (7,922,145) (8,612,173) (6,448,206) (2,968,005) (1,428,755) 1 15,070,000 - 3,440,000 2,815,000 2,170,000 - 299,183 753,024 2,700 17,700 - - - 20,275 9,956 16,741 - 1 - (2,190,000) - - - - 5,963,741 3,374,566 6,683,532 4,411,281 4,605,693 4,958,133 (3,312,078) (1,529,396) (3,354,364) (2,188,333) (2,224,692) (3,462,100) 1 18,020,846 408,194 6,792,143 5,065,604 4,567,742 1,496,033 1 $ 17,196,194 $ (7,513,951) $ (1,820,030) $ (1,382,602) $ 1,599,737 $ 67,278 I 15% 16% 19% 16% 17% 16% 105 1 1 CITY OF SHAKOPEE Scott County, Minnesota 1Table 5 TAX CAPACITY AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY Last Ten Fiscal Years Taxable Tax Estimated Capacity as a Commercial Less: Less Net Net Taxable Total Taxable Percentage of Fiscal Residential Industrial Other Tax Increment Fiscal Tax Direct Market Estimated Year Property Property Property Property Disparities Capacity Tax Rate Value Market Value 2000 $ 8,920,457 $ 10,681,728 $ 530,294 $ 1,211,989 $ 1,718,112 $ 17,202,378 0.20132 $ 1,087,145,000 1.58% 2001 11,560,704 13,820,811 542,037 1,801,828 1,997,080 22,124,644 0.17983 1,369,102,400 1.62% 2002 11,469,272 10,023,762 409,721 975,773 1,543,453 19,383,529 0.33976 1,743,136,300 1.11% 2003 13,890,536 10,452,944 589,540 497,860 2,035,749 22,399,411 0.33939 2,062,115,200 1.09% 2004 16,721,302 10,609,240 913,912 497,255 2,121,170 25,626,029 0.32433 2,464,564,300 1.04% 2005 20,394,086 11,749,438 528,300 327,963 2,132,628 30,211,233 0.31115 2,654,161,900 1.14% 2006 23,162,320 12,710,783 565,215 352,543 1,615,190 34,470,585 0.30974 2,987,657,400 1.15% 2007 26,817,616 14,013,644 675,479 378,593 1,963,379 39,164,767 0.31939 3,419,040,600 1.15% 2008 29,942,078 15,426,355 741,679 411,490 1,846,919 43,851,703 0.31925 3,800,795,500 1.15% 2009 29,805,971 16,088,685 1,319,935 156,799 1,862,715 45,195,077 0.32630 3,850,591,200 1.17% Source: Scott County Auditor 1 1 1 1 1 1 1 1 106 1 1 CITY OF SHAKOPEE Scott County, Minnesota Table 6 DIRECT AND OVERLAPPING PROPERTY TAX RATES 1 Last Ten Fiscal Years 1 City Direct Rate General Obligation Shakopee Debt Service 1 Fiscal Operating Debt Service Total Direct School Scott Other Market Value Year Rate Rate Rate District County Jurisdictions Rate 1 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 1 2002 0.33194 0.00782 0.33976 0.26080 0.39517 0.04976 0.00764 1 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 1 2005 0.29855 0.01260 0.31115 0.25215 0.35361 0.04660 0.00969 1 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 1 2008 0.29874 0.02051 0.31925 0.26103 0.32646 0.04642 0.00537 I 2009 0.30401 0.02229 0.32630 0.27274 0.32684 0.04960 0.00651 Sources: Scott County Auditor 1 1 1 1 1 1 107 1 1 CITY OF SHAKOPEE Scott County, Minnesota I Table 7 PRINCIPAL TAXPAYERS Current Year and Nine Years Ago 1 2009 1999 Percentage Percentage 2008/09 of Total 1998/99 of Total Tax Cap. Tax Cap. Tax Cap. Tax Cap. Taxpayer Type of Business Value Rank Value Value Rank Value Excel Energy Electrical Generation $ 505,380 1 1.07% $ 708,161 2 4.15% 1 Shakopee Valley Market Retail 422,786 2 0.90% Certainteed Manufacturing 419,420 3 0.89% 232,602 9 1.36% 1 Rahr Malting Grain Processing 415,278 4 0.88% 724,530 1 4.24% Ryan Companies Property Management 406,274 5 0.86% 1 Seagate Manufacturing/Research 399,250 6 0.85% Ryan Mpls II LLC Property Management 389,250 7 0.82% 1 Valley Fair Amusement Park 361,371 8 0.76% 500,522 4 2.93% St. Francis RMC Health Care 358,500 9 0.76% I First Industrial LP Property Management 357,864 10 0.76% Canterbury Park Horse Racing 208,846 10 1.22% 1 KMart Warehouse Warehouse/Distribution Center 590,163 3 3.45% Tsumara Manufacturing 442,628 6 2.59% 1 Principal Mutual Mortgage Financial 279,675 8 1.64% ADC Telecommunications Electronics 475,223 5 2.78% II Silgan Container Warehouse 249,557 7 1.46% $ 4,035,373 8.55% $ 4,411,907 25.82% 1 Source: Scott County Auditor 1 1 1 1 108 1 1 1 CITY OF SHAKOPEE I Scott County, Minnesota Table 8 PROPERTY TAX LEVIES AND COLLECTIONS Last Ten Fiscal Years I Ratio of Accumulated I Percentage Delinquent Collections Percentage Collections of Total Accumulated Taxes to Year Tax of Current of Levy of Prior Total Collections Delinquent Current Collected Levy Years Taxes Collected Years Taxes Collections To Tax Levy Taxes Years Taxes 1 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% I 2002 6,645,713 6,484,920 98% 41,342 6,526,262 98% 70,622 1.06% I 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% I 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% 1 2007 12,745,449 12,418,768 97% 91,200 12,509,968 98% 331,315 2.60% 2008 14,222,007 13,661,366 96% 208,470 13,869,836 98% 483,317 3.40% 1 2009 14,983,677 14,457,378 96% 157,920 14,615,298 98% 319,740 2.13% Source: Scott County Auditor I 1. The above data does not include tax increment districts. 2. The State of Minnesota cancelled $ 561,000 in 2003 to 2006, $ 243,439 in 2008 and $511,956 in 2009 of annual aid payments to the City that were part of the tax levy. 1 1 1 1 1 1 1 109 1 1 CITY OF SHAKOPEE Scott County, Minnesota 1 Table 9 RATIO OF OUTSTANDING DEBT BY TYPE Last Ten Fiscal Years 1 Governmental Activities 1 G.O. Revenue Business -type Tax Special Activities Total Percentage Fiscal G.O. Increment Assessment Revenue Primary of Personal Per I Year Bonds Bonds Bonds Bonds Government Income Capita 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 1 2002 2,565,000 390,000 14,055,000 25,660,000 42,670,000 5.5% 1,785 1 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 1 2005 8,275,000 - 16,360,000 24,750,000 49,385,000 4.7% 1,593 1 2006 7,950,000 - 17,070,000 34,535,000 59,555,000 5.5% 1,816 2007 7,560,000 - 17,165,000 33,895,000 58,620,000 4.8% 1,752 1 2008 7,165,000 - 16,450,000 33,225,000 56,840,000 4.1% 1,689 1 2009 6,755,000 - 14,200,000 22,235,000 43,190,000 N/A 1,276 Sources: See Table 14 for income and population data. 1 Bureau of Economic Analysis 1 1 1 1 1 1 110 1 1 CITY OF SHAKOPEE Scott County, Minnesota 1 Table 10 RATIOS OF GENERAL BONDED OUTSTANDING Last Ten Fiscal Years Percentage of Percentage of I Actual Taxable Total Fiscal G.O. Value of Per Personal I Year Bonds Property Capita Income 2000 $ 2,780,000 0.26% $ 135 0.40% 1 2001 2,675,000 0.20% 121 0.36% 1 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% 1 2005 8,275,000 0.27% 267 0.76% 1 2006 7,950,000 0.27% 242 0.65% 2007 7,560,000 0.21% 226 0.61% 1 2008 7,165,000 0.19% 213 0.52% 1 2009 6,755,000 0.18% 199 N/A 1 Sources: 1. Metropolitan Council population estimated except for 2000 which is the the official census figure. 2005 -2009 are the City's estimate. 1 2. Scott County Auditor 1 1 1 1 I 111 1 1 1 1 1 1 1 1 1 (THIS PAGE LEFT BLANK INTENTIONALLY) 1 1 1 1 1 1 1 1 1 112 1 CITY OF SHAKOPEE Scott County, Minnesota Table 11 DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT December 31, 2009 Percentage Amount Applicable Applicable G.O. To City of To City of Debt Shakopee Shakopee III City of Shakopee $ 20,955,000 100.0% $ 20,955,000 Independent School District No. 720 166,945,000 85.3% 142,404,085 Independent School District No. 191 93,005,000 1.2% 1,116,060 I S cott County 90,795,000 26.2% 23,788,290 Metropolitan Council 1,190,835,500 1.0% 12,468,048 Total Direct and Overlapping Debt $ 1,562,535,500 $ 200,731,483 I Source: Scott County Auditor Dakota County Auditor Metropolitan Council 1 1 1 1 1 1 1 1 ' 113 1 CITY OF SHAKOPEE Scott County, Minnesota 1 LEGAL DEBT MARGIN INFORMATION Last Ten Fiscal Years 2000 2001 2002 2003 Market Value (Taxable) $ 1,087,145,000 $1,369,102,400 $ 1,743,136,300 $2,062,115,200 Debt Limit - Percent of Market Value (Note A) 21,742,900 27,382,048 34,862,726 41,242,304 Amount of Debt Applicable to Debt Limit: G.O. Bonds 2,780,000 2,675,000 2,565,000 2,445,000 Available in Debt Service Funds (357,547) (390,619) (284,119) (297,657) Total Debt Applicable to Debt Limit 2,422,453 2,284,381 2,280,881 2,147,343 Legal Debt Margin $ 19,320,447 $ 25,097,667 $ 32,581,845 $ 39,094,961 1 NOTE (A): M.S.A. Section 475.53 (Limit on Net Debt) Subdivision 1. Generally, except of otherwise provided in Sections 475.51 to 475.75, no municipality, except a school district or a city of the first class, shall incur or be subject to a net debt in excess of 2% (3% starting 2008) of the market value of taxable property in the municipality." NOTE (B): M.S.A. Section 475.51 Definitions: Subdivision 4. "Net debt" means the amount remaining after deduction from its gross debt the aggregate of the principal of the following: (1) Obligations issued for improvements which are payable wholly or partly from the proceeds of special assessments levied upon property specially benefited thereby, including those which are general obligations of the municipality issuing them, if the municipality is entitled to reimbursement in whole or in part from the proceeds of the special assessments. (2) Warrants or orders having no definite or fixed maturity. (3) Obligations payable wholly from the income of revenue - producing conveniences. (4) Obligations issued to create or maintain a permanent improvement revolving fund. (5) Obligation issued for the acquisition, and betterment of public waterworks systems, and public lighting, heating or power systems and on any combination thereof or for any other public convenience from which a revenue is or may be derived. (6) Amount of all money and the face value of all securities held as a sinking fund for the extinguishment of obligations other than those deductible under this subdivision. 1 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. 1 114 1 1 Table 12 1 1 2004 2005 2006 2007 2008 2009 $ 2,464,564,300 $ 2,654,161,900 $ 2,987,657,400 $ 3,419,040,600 $ 3,800,795,500 $ 3,850,591,200 49,291,286 53,083,238 59,753,148 68,380,812 114,023,865 115,517,736 1 10,595,000 8,275,000 7,950,000 7,560,000 7,165,000 6,755,000 ' (2,539,292) (1,155,148) (810,494) (834,155) (847,608) (837,100) 8,055,708 7,119,852 7,139,506 6,725,845 6,317,392 5,917,900 1 $ 41,235,578 $ 45,963,386 $ 52,613,642 $ 61,654,967 $ 107,706,473 $ 109,599,836 1 1 1 1 1 1 1 1 1 115 1 1 CITY OF SHAKOPEE Scott County, Minnesota Table 13 PLEDGED REVENUE COVERAGE 1 Last Ten Fiscal Years Utility Bonds 1 Utility Less: Net Fiscal Service Operating Available Debt Service 1 Year Charges Expense Revenue Principal Interest Coverage 2000 $ 19,212,094 $ 14,212,682 $ 4,999,412 $ 230,000 $ 620,116 5.88 1 2001 21,667,471 16,153,413 5,514,058 235,000 797,759 5.34 1 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 1 2004 25,473,439 19,778,149 5,695,290 640,000 1,307,626 2.92 1 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 1 2007 44,692,049 36,644,414 8,047,635 640,000 1,574,925 3.63 1 2008 45,499,791 38,689,351 6,810,440 670,000 1,523,198 3.11 1 2009 42,437,910 33,009,500 9,428,410 710,000 1,012,874 5.47 1. Operating expense excludes depreciation. 1 1 1 1 1 1 116 1 1 1 CITY OF SHAKOPEE Scott County, Minnesota Table 14 1 DEMOGRAPHIC AND ECONOMIC STATISTICS Last Ten Calendar Years Fiscal School Unemployment Total Per Capita Personal Year Population (1) Enrollment (2) Rate (3) Employment Income (4) Income (5) I 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 1 2003 24,967 4,790 4.3% 15,887 32,760 817,918,920 I 2004 28,913 5,121 3.9% 16,213 34,284 991,253,292 2005 31,000 6,247 3.6% 16,192 35,956 1,114,636,000 1 2006 32,800 6,643 3.7% 17,787 37,023 1,214,354,400 I 2007 33,460 6,905 4.6% 18,225 39,042 1,306,345,320 2008 33,660 7,163 6.7% 18,688 40,851 1,375,044,660 1 2009 33,860 7,465 6.8% 18,926 N/A N/A Source: 1. Metropolitan Council population estimates except for 2000 which is the official census figure. 2005 -2009 are the City's estimate. 2. Shakopee School District, SACS, Bloomington Lutheran 1 3. Minnesota Department of Employment and Economic Development 4. Bureau of Economic Analysis 5. Scott County per capita income times population 1 1 1 1 117 1 1 1 1 1 1 1 1 1 1 (THIS PAGE LEFT BLANK INTENTIONALLY) 1 1 1 1 1 1 1 1 1 118 1 1 CITY OF SHAKOPEE 1 Scott County, Minnesota Table 15 PRINCIPAL EMPLOYERS Current Year and Nine Years Ago 2009 1999 I Total Total City City Taxpayer Type of Business Employees Rank Employment Employees Rank Employment I Valley Fair Amusement Park 1,600 1 8.45% 1,537 1 11.03% Seagate Manufacturing/Research 1,200 2 6.34% I School District No. 720 Education 1,090 3 5.76% 437 4 3.14% St. Francis RMC Health Care 1,000 4 5.28% 363 7 2.60 °l0 I Canterbury Park Horse Racing 801 5 4.23% I Scott County Government 805 6 4.25% 500 3 3.59% North Star Auto Auction Auto Auction 350 7 1.85% I Anchor Glass Glass Container Manufacturing 279 8 1.48% 278 9 1.99% TORO Manufacturing 240 9 1.27% 275 10 1.97% 1 City of Shakopee Government 234 10 1.24% ADC Manufacturing 650 2 4.66% I Kmart Distribution Center 424 5 3.05% American Color - SVP Printing 415 6 2.98% I CertainTeed Roofing Manufacturing 300 8 2.15% 7,599 40.15% 5,179 37.16% I Total employment 18,926 13,938 I Source: Minnesota Department of Employment and Economic Development. Telephone survey 1 1 1 119 1 CITY OF SHAKOPEE 1 Scott County, Minnesota FULL -TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES I BY FUNCTION /PROGRAM Last Ten Fiscal Years 1 2000 2001 2002 2003 2004 General Government: 1 Administration 4 6 6 6 6 City Clerk 4 4 3 4 4 Finance 4 4 4 3 3 I Planning 5 5 6 6 5 Facilities Maintenance 1 1 1 1 4 I Information Technology - 1 1 1 2 Public Safety: I Police: Licensed 24 25 34 34 40 Other 6 6 7 7 7 I Fire: Full time - - - - - Paid On Call 47 47 50 50 50 I Building Inspection 7 7 7 7 8 Public Works: 1 Engineering 8 9 9 9 9 Street 9 9 9 9 11 111 Shop 2 2 2 3 3 Park and Recreation: I Park Maintenance 5 6 7 7 7 Recreation 7 9 8 8 8 Subtotal 132 141 154 155 167 1 Shakopee Public Utilities: Electric 1 Water Other Subtotal 1 Total i Source: City departments 1 120 1 1 1 Table 16 1 1 2005 2006 2007 2008 2009 1 6 6 5 5 5 4 4 4 4 4 1 3 3 3 3 3 5 5 5 5 5 4 6 6 7 6 I 2 2 2 2 2 1 42 45 46 :!8 47 1 9 7 7 6 1 3 50 48 48 48 7 5 1 9 9 7 7 7 1 12 12 12 13 3 13 3 3 3 3 1 7 7 8 8 8 10 10 10 7 7 1 174 175 174 173 168 1 15 18 16 16 7 8 8 8 16 16 17 18 1 38 42 41 42 1 213 216 214 210 1 121 1 1 CITY OF SHAKOPEE Scott County, Minnesota 1 OPERATING INDICATORS BY FUNCTION/PROGRAM Last Ten Fiscal Years 1 2000 2001 2002 2003 2004 I General Government: Planning: Number of Case Files 101 102 121 127 109 I Number of Plats Filed 16 19 10 11 9 Number of Acres Platted 119 142 378 385 238 Public Safety: 1 Police: Arrests N/A N/A 1,348 1,147 1,248 I Citations N/A N/A 3,805 3,129 3,802 Calls for Service N/A 13,213 13,939 14,799 16,062 Fire: I Calls for Service 457 488 446 482 479 Building Inspection: Building Permits Issued 1,473 1,469 1,310 1,744 1,638 1 Number of Inspections 12,204 11,878 11,416 15,016 14,535 Single Family Homes Permitted 458 442 260 384 396 Public Works: 1 Engineering: Amount of Construction (000) 3,850 7,048 14,160 9,569 17,927 1 Street: Miles of Roadway 119 124 131 138 114 Park and Recreation: 1 Park Maintenance: Acres Maintained 612 638 655 671 760 1 Recreation: Program Participants N/A N/A 9,911 10,194 9,693 Community Center Members N/A N/A 520 556 541 Il Community Center Admissions N/A N/A 70,088 77,014 75,018 Shakopee Public Utilities: I Electric: Number of Metered Accounts - - - - - KWH Sold (mw) - - - - - Peak Demand KW 62,500 71,100 67,000 74,700 70,000 1 Water: Number of Metered Accounts - - - - - Gallons Pumped (mg) 1,271 1,422 1,364 1,629 1,716 1 Peak Demand (mg) 8.81 10.03 8.60 12.30 10.36 Source: City departments 1 122 1 1 1 Table 17 1 1 2005 2006 2007 2008 2009 I 120 91 67 68 35 7 10 3 2 2 321 155 38 50 34 1 1 1,451 1,770 2,199 1,881 1,913 3,843 4,970 6,073 4,058 6,127 17,363 18,333 19,606 19,057 17,909 1 539 494 609 538 517 I 9,67 1,512 1,131 1,194 1,019 1,102 15,175 8,174 5,946 9,726 352 223 138 94 314 1 1 13,178 10,279 4,730 1,351 1,885 123 153 154 154 154 1 I 925 930 930 933 933 9,842 9,928 10,847 11,410 10,377 1 516 578 597 613 823 77,543 91,776 100,044 100,397 109,257 1 14,698 15,275 15,436 15,625 15,984 401 371 397 393 376 1 86,500 94,100 93,058 86,877 85,603 9,310 9,717 9,924 10,156 10,470 1 1,762 1,931 1,909 1,775 1,866 12.41 13.37 15.00 13.59 12.80 1 i 123 1 CITY OF SHAKOPEE 1 Scott County, Minnesota CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM Last Ten Fiscal Years 1 2000 2001 2002 2003 2004 1 Police: Stations 1 1 1 1 1 1 Patrol Zones 4 4 4 4 4 Patrol Units 10 11 12 12 13 Fire Stations 2 2 2 2 2 Street: 1 Miles of Roadway 119 124 131 138 114 Traffic Signals 21 21 21 23 25 1 Parks: Acres 612 638 655 671 760 Ball Fields 42 42 42 42 46 Playgrounds 11 12 12 13 13 Electric: I Number of Substations 4 4 4 4 4 Water: ' Miles of Water Mains Fire Hydrants Storage Capacity (mg) 10 Source: City departments 1 1 1 1 1 1 124 1 1 1 Table 18 1 1 2005 2006 2007 2008 2009 I 1 1 1 1 1 4 4 4 4 4 13 15 15 15 15 I 2 2 2 2 2 1 123 153 154 154 154 1 25 25 25 26 27 1 925 1,015 1,015 1,019 1,024 46 47 47 49 49 13 18 22 24 24 1 1 4 4 4 4 4 1 145 145 145 146 1,750 1,750 1,751 1,850 10 10 10 10 10 1 1 1 1 1 1 125 1