HomeMy WebLinkAbout8. Bond Sale Results-Refunding of 2004A and 2004D-Res. No. 7199 � �
City of Shakopee
Memorandum
To: Mayor and City Council
Mark McNeill, City Administrator
From: Julie A. Linnihan, Finance Director �� ��"
`�
Subject: Bond Sale Results— Refunding of 2004A and 2004D
Date: May 15, 2012
Introduction:
On April 17th, 2012,the City Council approved Resolution#7185, providing for the Sale of$4,960,000 of
Refunding Bonds, for the initial City issues of 2004A and 2004D. The action established the sale date for
these bonds on May 15th, 2012.
Back�round:
City staff and the City's Financial Advisor, Springsted, have discussed and determined that the City would
benefit from the refunding of the two bond issues that carry a longer term,with maturity into 2025.The
City has recently completed the bond rating review process, as conducted by Moody's. At the time of
agenda preparation, the City had not yet received information as to the credit rating review.This
information will be distributed to Council when received.
Springsted will receive the bids for the sale on Tuesday morning, May 15`h, 2012.The results of this sale
will be brought to Council on Tuesday evening, and additional information will also be provided as to the
anticipated savings, interest rate and low bidder in the sale process. Mr. Paul Steinman from Springsted
will be present to provide Council with the most recent sale information and the results of the sale.
The Resolution provided in the agenda packet is a template of what will be prepared when the actual
sale is completed, and is provided as a guide, with completion of the resolution information at the time
of sale.
Recommendation:
It is recommended that Council approve and accept the bids for the refunding bond sale.
Requested Action:
Offer Resolution No. 7199,A Resolution Awarding the Sale of$4,960,000 General Obligation
Improvement Refunding Bonds, Series 2012A
RESOLUTION NO.
A RESOLUTION AWARDING THE SALE OF GENERAL
OBLIGATION IMPROVEMENT REFUNDING BONDS,
SERIES 2012A, IN THE ORIGINAL AGGREGATE PRINCIPAL
AMOUNT OF $4,960,000; FIXING THEIR FORM AND
SPECIFICATIONS; DIRECTING THEIR EXECUTION AND
DELIVERY; PROVIDING FOR THEIR PAYMENT; PROVIDING
FOR THE ESCROWING AND INVESTMENT OF THE
PROCEEDS THEREOF; AND PROVIDING FOR THE
REDEMPTION OF BONDS REFUNDED THEREBY
BE IT RESOLVED By the City Council of the City of Shakopee, Scott County, Minnesota
(the"City")as follows:
Section 1. Findin�s; Sale of Bonds.
1 Al. Authorization of Sale of Bonds. Pursuant to a resolution adopted by the City Council of
the City on April 17, 2012, the City Council gave preliminary approval to the issuance of the City's
General Obligation Improvement Refunding Bonds, Series 2012A (the "Bonds"), in the proposed
aggregate principal amount of $4,960,000, pursuant to Minnesota Statutes, Chapters 429 and 475, as
amended, and Minnesota Statutes, Sections 475.521 and 475.67, subdivision 13 (collectively, the "Act").
The Bonds are being issued to refund in advance of maturity and at their respective redemption dates the
following outstanding obligations of the City(together,the "Prior Bonds"):
(a) the 2015 through 2025 maturities of the General Obligation Improvement Bonds,
Series 2004A (the "Prior Improvement Bonds"), dated May 1, 2004, issued by the City in the
original aggregate principal amount of$4,225,000, of which $1,1 10,000 in principal amount will
be called for redemption on February 1, 2014; and
(b) the 2016 through 2025 maturities of the General Obligation Capital Improvement
Plan Bonds, Series 2004D (the "Prior CIP Bonds"), dated November l, 2004, issued by the City
in the origina( aggregate principal amount of $6,000,000, of which $3,580,000 in principal
amount will be called for redemption on February 1,2015.
1.02. Award to the Purchaser and Interest Rates. The proposal of
(the"Purchaser")to purchase the Bonds of the City is determined to be a reasonable offer and is accepted,the
proposal being to purchase the Bonds at a price of $ (par amount of $4,960,000, [plus an
original issue premium of $ ,] [less an original issue discount of $ ,] less an
underwriter's discount of$_), plus accrued interest to date of delivery, if any, for Bonds bearing
interest as follows:
403360v1 JAE SH155-269 2
Year Interest Rate Year Interest Rate
2015 % 2021 %
2016 2022
2017 2023
2018 2024
2019 2025
2020
True interest cost: %
1.03. Purchase Contract. The sum of$ , being the amount proposed by the Purchaser
in excess of $4,917,840, shall be credited to the Debt Service Fund hereinafter created or the Escrow
Fund hereinafter created unless the funds are determined to be deposited in another fund by action of the
Finance Director/City Clerk of the City in consultation with the City's financial advisor. The Finance
Director/City Clerk is directed to deposit the good faith check or deposit of the Purchaser, pending
completion of the sale of the Bonds, and to return the good faith deposits of the unsuccessful proposers.
The Mayor and City Administrator are directed to execute a contract with the Purchaser on behalf of the
City.
1.04. Terms and Principal Amount of Bonds. The City will forthwith issue and sell the Bonds
pursuant to the Act in the original aggregate principal amount of$4,960,000,originally dated June l, 2012, in
the denomination of $5,000 each or any integral multiple thereof, numbered No. R-1, upward, bearing
interest as above set forth,and maturing serially on February 1 in the years and amounts as follows:
Year Amount Year Amount
2015 $ 2021 $
2016 2022
2017 2023
2018 2024
2019 2025
2020
(a) $ in principal amount of the Bonds (the "Improvement Refunding
Bonds") maturing in the amounts and on the dates set forth below are being used to refund in
advance of maturity and at their redemption date the 2015 through 2025 maturities of the Prior
Improvement Bonds:
Year Amount Year Amount
2015 $ 2021 $
2016 2022
2017 2023
2018 2024
2019 2025
2020
(b) The remainder of the Bonds in the principal amount of $ (the "CIP
Refunding Bonds") maturing in the amounts and on the dates set forth below are being used to
403360v]JAE SHI55-269 3
refund in advance of maturity and at their redemption date the 2016 through 2025 maturities of the
Prior CIP Bonds:
Year Amount Year Amount
2016 $ 2021 $
2017 2022
2018 2023
2019 2024
2020 2025
1.05. Optional Redemption. The City may elect on February l,2021, and on any day thereafter
to prepay Bonds due on or after February 1, 2022. Redemption may be in whole or in part and if in part, at
the option of the City and in such manner as the City will determine. If less than all Bonds of a maturity are
called for redemption, the City will notify DTC (as defined in Section 8 hereo� of the particular amount of
such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such
maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such
maturity to be redeemed. Prepayments will be at a price of par plus accrued interest.
[1.06. Mandatory Redemption; Term Bonds. To be completed if Term Bonds are requested by
the Purchaser.]
Section 2. Registration and Payment.
2.01. Re�istered Form. The Bonds will be issued only in ftilly registered form. The interest
thereon and, upon surrender of each Bond, the principal amount thereof, is payable by check or draft issued
by the Registrar described herein.
2.02. Dates; Interest Payment Dates. Each Bond will be dated as of the last interest payment date
preceding the date of authentication to which interest on the Bond has been paid or made available for
payment, unless (i) the date of authentication is an interest payment date to which interest has been paid or
made available for payment, in which case the Bond will be dated as of the date of authentication, or(ii) the
date of authentication is priar to the first interest payment date, in which case the Bond will be dated as of the
date of original issue. The interest on the Bonds is payable on February 1 and August 1 of each year,
commencing February 1, 2013, to the registered owners of recard as of the close of business on the fifteenth
day of the immediately preceding month,whether or not that day is a business day.
2.03. Registration. The City will appoint a bond registrar,transfer agent, authenticating agent and
paying agent (the"Registrar"). The effect of registration and the rights and duties of the City and the
Registrar with respect thereto are as follows:
(a) Re i� ster. The Registrar must keep at its principal corporate tnist office a bond
register in which the Registrar provides for the registration of ownership of Bonds and the
registration of transfers and exchanges of Bonds entitled to be registered,transferred or exchanged.
(b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed by the
registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to
the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the
registered owner in writing,the Registrar will authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity,
as requested by the transferor. The Registrar may, however, close the books for registration of any
403360v1 JAE SH155-269 4
transfer after the fifteenth day of the month preceding each interest payment date and until that
interest payment date.
(c) Exchan�e of Bonds. When Bonds are surrendered by the registered owner for
exchange the Registrar will authenticate and deliver one or more new Bonds of a like aggregate
principal amount and maturity as requested by the registered owner or the owner's attorney in
writing.
(d) Cancellation. Bonds s�irrendered upon transfer or exchange will be promptly
cancelled by the Registrar and thereafter disposed of as directed by the City.
(e) Improper or Unauthorized Transfer. When a Bond is presented to the Registrar for
transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the
endorsement on the Bond or separate instrument of transfer is valid and genuine and that the
requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in good
faith,to make transfers which it, in its judgment,deems improper or unauthorized.
(fl Persons Deemed Owners. The City and the Registrar may treat the person in whose
name a Bond is registered in the bond register as the absolute owner of the Bond, whether the Bond
is overdue or not, for the purpose of receiving payment of, or on account of, the principal of and
interest on the Bond and for all other purposes, and payments so made to a registered owner or upon
the owner's order will be valid and effectual to satisfy and discharge the liability upon the Bond to
the extent of the sum or sums so paid.
(g) Taxes, Fees and Char�es. The Registrar may impose a charge upon the owner
thereof for a transfer or exchange of Bonds sufficient to reimburse the Registrar for any tax, fee or
other governmental charge required to be paid with respect to the transfer or exchange.
(h) Mutilated, Lost, Stolen or Destroved Bonds. If a Bond becomes mutilated or is
destroyed, stolen or lost,the Registrar will deliver a new Bond of like amount,number, maturity date
and tenor in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of
and in substitution for any Bond destroyed, stolen or lost, upon the payment of the reasonable
expenses and charges of the Registrar in connection therewith; and, in the case of a Bond destroyed,
stolen or lost, upon filing with the Registrar of evidence satisfactory to it that the Bond was
destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar an
appropriate bond or indemnity in form, substance and amount satisfactory to it and as provided by
law, in which both the City and the Registrar must be named as obligees. Bonds so surrendered to
the Registrar will be cancelled by the Registrar and evidence of such cancellation must be given to
the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for
redemption in accordance with its terms it is not necessary to issue a new Bond prior to payment.
(i) Redemption. In the event any of the Bonds are called for redemption, notice thereof
identifying the Bonds to be redeemed will be given by the Registrar by mailing a copy of the
redemption notice by first class mail (postage prepaid) to the registered owner of each Bond to be
redeemed at the address shown on the registration books kept by the Registrar and by publishing the
notice if required by law. Failure to give notice by publication or by mail to any registered owner, or
any defect therein, will not affect the validity of any proceeding for the redemption of Bonds. Bonds
so called far redemption will cease to bear interest after the specified redemption date, provided that
the funds for the redemption are on deposit with the place of payment at that time.
403360v1 JAE SH 155-269 5
2.04. Appointment of Initial Re i� strar. The City appoints U.S. Bank National Association, Saint
Paul,Minnesota,as the initial Registrar. The Mayor and the City Administrator are authorized to execute and
deliver, on behalf of the City, a contract with the Registrar. Upon merger or consolidation of the Registrar
with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct
such business,the resulting corporation is authorized to act as successor Registrar. The City agrees to pay the
reasonable and customary charges of the Registrar for the services performed. The City reserves the right to
remove the Registrar upon 30 days' notice and upon the appointment of a successor Registrar, in which event
the predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar and
must deliver the bond register to the successor Registrar. On or before each principal or interest due date,
without further order of this Council, the Finance Director/City Clerk must transmit to the Registrar moneys
sufficient for the payment of all principal and interest then due.
2.05. Execution, Authentication and Deliverv. The Bonds will be prepared under the direction of
the City Administrator and executed on behalf of the City by the signatures of the Mayor and the City
Administrator, provided that those signatures may be printed, engraved or lithographed facsimiles of the
originals. If an officer whose signature or a facsimile of whose signature appears on the Bonds ceases to be
slich officer before the delivery of a Bond,that signature or facsimile will nevertheless be valid and sufficient
for all purposes, the same as if the officer had remained in office until delivery. Notwithstanding such
execution, a Bond will not be valid or obligatory for any purpose or entitled to any security or benefit under
this resolution unless and until a certificate of authentication on the Bond has been duly executed by the
manual signature of an authorized representative of the Registrar. Certificates of authentication on different
Bonds need not be signed by the same representative. The executed certificate of authentication on a Bond is
conclusive evidence that it has been authenticated and delivered under this resolution. When the Bonds have
been so prepared, executed and authenticated, the City Administrator will deliver the same to the P�irchaser
upon payment of the purchase price in accordance with the contract of sale heretofore made and executed,
and the Purchaser is not obligated to see to the application of the purchase price.
2.06. Temporarv Bonds. The City may elect to deliver in lieu of printed definitive Bonds one or
more typewritten temporary Bonds in substantially the form set forth in EXHIBIT B attached hereto, with
such changes as may be necessary to reflect more than one maturity in a single temporary bond. Upon the
execution and delivery of definitive Bonds the temporary Bonds will be exchanged therefor and cancelled.
Section 3. Form of Bond.
3.01. Execution of the Bonds. The Bonds will be printed or typewritten in substantially the form
attached hereto as EXHIBIT B.
3.02. Approving Le ag 1 Opinion. The City Administrator is authorized and directed to obtain a
copy of the proposed approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota,
which is to be complete except as to dating thereof and cause the opinion to be printed on or accompany each
Bond.
Section 4. Bonds; Security; Covenants; Escrow.
4.01. Debt Service Fund. For the convenience and proper administration of the moneys to be
borrowed and repaid on the Bonds, and to provide adequate and specific security for the Purchaser and
holders from time to time of the Bonds, there is hereby created a special fund to be designated the
Improvement Refunding Bonds, Series 2012A Debt Service Fund (the"Debt Service Fund") to be
administered and maintained by the Finance Director/City Clerk as a bookkeeping account separate and apart
from all other funds maintained in the official financial records of the City. The Debt Service Fund will be
maintained in the manner herein specified until all of the Prior Bonds have been paid and until all of the
403360v1 JAE SH155-269 (
Bonds and the interest thereon have been fully paid. The City will maintain the following accounts in the
Debt Service Fund: the"Improvement Account"and the"CIP Account."
(a) Improvement Account. To the Improvement Account of the Debt Service Fund,
there is hereby pledged and irrevocably appropriated and there will be credited: (i)a pro rata portion
of any balance remitted to the City upon the termination of the Escrow Agreement (as defined
herein); (ii)after February 1, 2014 (the "Prior Improvement Bonds Redemption Date"), special
assessments pledged to the payment of the Prior Improvement Bonds pursuant to the resolution
authorizing the sale and issuance of the Prior Improvement Bonds (the "Prior Improvement Bonds
Resolution"); (iii)all investment earnings on funds in the Improvement Account of the Debt Service
Fund; and (iv)any and all other moneys which are properly available and are appropriated by the
City Council to the Improvement Acco�mt. The amount of any surplus remaining in the
Improvement Account when the Improvement Refunding Bonds and interest thereon are paid will be
used as provided in Section 475.61, subdivision 4 of the Act. There is also appropriated to the
Improvement Account of the Debt Service Fund a pro rata portion of(i)amounts over the minimum
purchase price paid by the Purchaser,to the extent designated for deposit in the Debt Service Fund in
accordance with Section 1.03; and (ii) the accrued interest paid by the Purchaser upon closing and
delivery of the Bonds, if any. The debt service fund heretofore established for the Prior
Improvement Bonds p�irsuant to the Prior Improvement Bonds Resolution shall be terminated after
the Prior Improvement Bonds Redemption Date, and all monies therein are hereby transferred to the
Improvement Account herein created.
(b) CIP Account. To the CIP Account of the Debt Service Fund, there is hereby
pledged and irrevocably appropriated and there will be credited: (i)a pro rata portion of any balance
remitted to the City upon the termination of the Escrow Agreement; (ii) collections of all taxes
hereafter levied for the payment of the CIP Refimding Bonds and interest thereon; (iii) after
February 1, 2015 (the "Prior CIP Bonds Redemption Date"), taxes collected far the payment of the
Prior CIP Bonds after the Prior CIP Bonds Redemption Date pursuant to levies made in the
resol�ition authorizing the sale and issuance of the Prior CIP Bonds (the "Prior CIP Bonds
Resol��tion"),which levies will not be cancelled except as permitted by Section 475.61, subdivision 3
of the Act; (iv) all investment earnings on funds in the CIP Account of the Debt Service Fund; and
(v)any and all other moneys which are properly available and are appropriated by the City Council
to the C1P Account. The amount of any surplus remaining in the CIP Account when the CIP
Refunding Bonds and interest thereon are paid will be used as provided in Section 475.61,
subdivision 4 of the Act. There is also appropriated to the CIP Account of the Debt Service Fund a
pro rata portion of(i)amounts over the minimum purchase price paid by the Purchaser,to the extent
designated for deposit in the Debt Service F�md in accordance with Section 1.03; and(ii)the accrued
interest paid by the Purchaser upon closing and delivery of the Bonds, if any. The debt service fund
heretofore established for the Prior CIP Bonds purs�iant to the Prior CIP Bonds Resolution shall be
terminated after the Prior CIP Bonds Redemption Date,and all monies therein are hereby transferred
to the CIP Account herein created.
4.02. Escrow Fund. A portion of the proceeds of the Bonds in the amount of$ will
be deposited in a separate fund(the "Escrow Fund") maintained by U.S. Bank National Association, in Saint
Paul, Minnesota, acting as escrow agent (the"Escrow Agent"). Such funds will be received by the Escrow
Agent and applied to fund the Escrow Fund or to pay costs of issuing the Bonds. Proceeds of the Bonds not
used to pay costs of issuance on the Bonds are hereby irrevocably pledged and appropriated to the Escrow
Fund,together with all investment earnings thereon. The Escrow Fund will be invested in securities�naturing
or callable at the option of the holder on such dates and bearing interest at such rates as will be required to
provide sufficient funds, together with any cash or other funds retained in the Escrow Fund to (i)pay when
due the interest to accrue on the Improvement Refunding Bonds to and including the Prior Improvement
403360v1 JAE SH155-269 �
Bonds Redemption Date; (ii) pay when due the interest to accrue on the CIP Refunding Bonds to and
including the Prior CIP Bonds Redemption Date; (iii)pay on the Prior Improvement Bonds Redemption Date
the principal amount of the Prior Improvement Bonds then outstanding; and(iv) pay on the Prior CIP Bonds
Redemption Date the principal amount of the Prior CIP Bonds then outstanding. The Escrow Fund will be
irrevocably appropriated to the payment of the principal of and interest on the(x) Prior Improvement Bonds
until the proceeds of the Improvement Refunding Bonds therein are applied to prepayment of the Prior
Improvement Bonds; and (y) Prior CIP Bonds until the proceeds of the CIP Refunding Bonds therein are
applied to prepayment of the Prior CIP Bonds. The moneys in the Escrow Fund will be used solely for the
purposes herein set forth and for no other purpose, except that any surplus in the Escrow Fund may be
remitted to the City, all in accordance with the Escrow Agreement by and between the City and the Escrow
Agent. Any moneys remitted to the City upon termination of the Escrow Agreement will be deposited in the
Improvement Account and the CIP Account of the Debt Service Fund,as described in Section 4.01 hereof.
4.03. General Obligation Pled�,e. For the prompt and full payment of the principal and interest on
the Bonds, as the same respectively become due, the full faith, credit and taxing powers of the City will be
and are hereby irrevocably pledged. If the balance in the Escrow Fund or Debt Service Fund is ever
insufficient to pay all principal and interest then due on the Bonds and any other bonds payable therefrom,the
deficiency will be promptly paid out of monies in the general fund of the City which are available for such
purpose, and such general fimd may be reimbursed with or without interest from the Escrow Fund or Debt
Service Fund when a sufFcient balance is available therein.
4.05. Pled�e of Tax Levies.
(a) To provide moneys for payment of the principal and interest on the CIP Refunding
Bonds maturing after the Prior CIP Bonds Redemption Date, there is hereby levied a direct ann��al
irrepealable ad valorem taY upon all of the taxable property in the City which will be spread upon the
tax rolls and collected with and as part of other general taxes of the City. Such t�will be credited to
the CIP Account of the Debt Service FLind above provided and will be in the years and in the
amounts attached hereto as EXHIBIT C.
(b) The tax levies are such that if collected in full they, together with estimated
collections of investment earnings(and until the Prior Improvement Bonds Redemption Date and the
Prior CIP Bonds Redemption Date, a pro rata portion of all amo�mts in the Escrow Fund), ad
valorem ta�ces, special assessments, and other reven��es herein pledged for the payment of the Bonds,
will produce at least five percent in excess of the amotmt needed to meet when due the principal and
interest payments on the Bonds. The tax levies will be irrepealable so long as any of the Bonds are
outstanding and unpaid, provided that the City reserves the right to reduce the levies in the manner
and to the extent permitted by Section 475.61, subdivision 3 of the Act.
4.06. Cancellation of Prior Levies after Prior CIP Bonds Redemption Date. Following the
payment in full of all outstanding principal of and interest on the Prior CIP Bonds on the Prior CIP Bonds
Redemption Date, the City Administrator is hereby directed to certify such fact to and request the County
Auditor of Scott County, Minnesota to cancel any and all tax levies for taxes payable in 20l 6 and thereafter
made by the Prior CIP Bonds Resolution.
4.07. Filing of Resolution. The City Administrator is authorized and directed to file a certified
copy of this resolution with the County Auditor and to obtain the certificate required by Section 475.63 of the
Act.
403360v1 JAE SH155-269 g
Section 5. Refunding; Findings; Redemption of Prior Bonds.
5.01. Purpose of Refundin�. The Prior Bonds consist of the City's Prior Improvement Bonds
and Prior CIP Bonds. The 2015 through 2025 maturities of the Prior Improvement Bonds will be called
for redemption on February 1, 2014, in the principal amount of $1,110,000. The 2016 through 2025
maturities of the Prior CIP Bonds will be called for redemption on February 1, 2015 in the amount of
$3,580,000. It is hereby found and determined that based upon information presently available from the
City's financial advisor, the issuance of the Bonds, a portion of which will be used to redeem and prepay
the Prior Bonds, is consistent with covenants made with the holders of the Prior Bonds.
5.02. Findin�s. It is hereby found and determined that based upon infonnation presently available
from the City's financial advisors, the issuance of the Bonds will result in a reduction of debt service cost to
the City on the Prior Bonds, such that the present value of such debt service or interest cost savings
(the"Reduction") is at least 3.00% of the debt service on the Prior Bonds. The Reduction, after the inclusion
of all authorized expenses of refunding in the computation of the effective interest rate on the Bonds, is
adequate to authorize the issuance of the Bonds as provided by Section 475.67, subdivisions 12 and 13 of the
Act.
5.03. Proceeds Pled�ed to the Escrow Fund. As of the date of delivery of and payment for the
Bonds, proceeds of the Bonds in the amount of$ are hereby pledged and appropriated and will be
deposited in the Escrow Fund for the purposes of (i) redeeming the principal of the 2015 through 2025
maturities of the Prior Improvement Bonds on the Prior Improvement Bonds Redemption Date;
(ii)redeeming the principal of the 2016 through 2025 maturities of the Prior CIP Bonds on the Prior CIP
Bonds Redemption Date; (iii) paying interest on the Improvement Refunding Bonds through the Prior
Improvement Bonds Redemption Date; and (iv) paying interest on the CIP Refunding Bonds through the
Prior CIP Bonds Redemption Date. Proceeds of the Bonds in the amount of$ will be deposited in
the Escrow Fund to pay the costs of issuance of the Bonds.
5.04. Securities to Fund Escrow Fund. Securities purchased, if any, from the moneys in the
Escrow Fund will be limited to securities specified in Section 475.67, subdivision 8 of the Act. Springsted
Incorporated and/or U.S. Bank National Association as agent for the City, is hereby authorized and directed
to purchase for and on behalf of the City and in its name, appropriate securities to fund the Escrow Fund.
Upon the issuance and delivery of the Bonds, the securities so purchased will be deposited with the Escrow
Agent and held pursuant to the terms of the Escrow Agreement(as defined herein)and the resolution.
5.05. Notices of Redemption. The Prior Improvement Bonds maturing on February l, 2015, and
thereafter will be redeemed and prepaid on the Prior Improvement Bonds Redemption Date in accordance
with their terms and in accordance with the terms and conditions set forth in the form of Notice of Call for
Redemption attached hereto as EXHIBIT D-1, which terms and conditions are hereby approved and
incorporated herein by reference. The Prior CIP Bonds maturing on February 1, 2016, and thereafter will be
redeemed and prepaid on the Prior CIP Bonds Rede�nption Date in accordance with their terms and in
accordance with the terms and conditions set forth in the form of Notice of Call for Redemption attached
hereto as EXHIBIT D-2, which terms and conditions are hereby approved and incorporated herein by
reference. The registrars for the Prior Bonds are authorized and directed to send a copy of the Notice of Call
for Redemption to each registered holder of the Prior Bonds.
5.06. Escrow Agreement. On or prior to the delivery of the Bonds, the Mayor, City
Administrator,and Finance Director/City Clerk are hereby authorized and directed to execute on behalf of the
City an escrow agreement (the"Escrow Agreement") with the Escrow Agent in substantially the form now
on file with the City Administrator. All essential terms and conditions of the Escrow Agreement including
payment by the City of reasonable charges for the services of the Escrow Agent, are hereby approved and
403360v1 JAE SH155-269 9
adopted and made a part of this resolution, and the City covenants that it will promptly enforce all provisions
thereof in the event of default thereunder by the Escrow Agent.
Section 6. Authentication of Transcript.
6.01. City Proceedin�s and Records. The officers of the City are authorized and directed to
prepare and furnish to the Purchaser and to the attorneys approving the Bonds, certified copies of proceedings
and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such
other certificates, affidavits and transcripts as may be required to show the facts within their knowledge or as
shown by the books and records in their custody and under their control, relating to the validity and
marketability of the Bonds, and such instruments, including any heretofore furnished, may be deemed
representations of the City as to the facts stated therein.
6.02. Certification as to Official Statement. The Mayor, City Administrator, and Finance
Director/City Clerk are hereby authorized and directed to certify that they have examined the Official
Statement prepared and circulated in connection with the iss�iance and sale of the Bonds and that to the best
of their knowledge and belief the Official Statement is a complete and accurate representation of the facts and
representations made therein as of the date of the Official Statement.
6.03. Other Certificates. The Mayor, City Administrator, and Finance Director/City Clerk are
hereby authorized and directed to furnish to the Purchaser at the closing such certificates as are required
as a condition of sale. Unless litigation shall have been commenced and be pending questioning the
Bonds or the organization of the City or incumbency of its officers, at the closing the Mayor, City
Administrator, and Finance Director/City Clerk shall also execute and deliver to the Purchaser a suitable
certificate as to absence of material litigation, and the Finance Director/City Clerk shall also execute and
deliver a certificate as to payment for and delivery of the Bonds.
Section 7. Tax Covenants.
7.01. Tax-Exempt Bonds. The City covenants and agrees with the holders from time to time of
the Bonds that it will not take or permit to be taken by any of its officers, employees or agents any action
which would cause the interest on the Bonds to become subject to taxation under the Internal Revenue Code
of 1986,as amended(the"Code"),and the Treasury Regulations promulgated thereunder, in effect at the time
of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action
within its power that may be necessary to ensure that such interest will not become subject to taxation under
the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made
applicable to the Bonds.
7.02. Rebate. The City will comply with requirements necessary under the Code to establish and
maintain the exclt�sion from gross income of the interest on the Bonds under Section 103 of the Code,
including without limitation requirements relating to temporary periods far investments, limitations on
amounts invested at a yield greater than the yield on the Bonds, and the rebate of excess investment earnings
to the United States.
7.03. Not Private Activi Bonds. The City further covenants not to use the proceeds of the Bonds
or to cause or permit them or any of them to be used, in such a manner as to cause the Bonds to be "private
activity bonds"within the meaning of Sections 103 and 141 through 150 of the Code.
7.04. Qualified Tax-Exempt Obli a�. In order to qualify the Bonds as "qualified tax-exempt
obligations" within the meaning of Section 265(b)(3) of the Code, the City makes the following factual
statements and representations:
403360v1 JAE SH155-269 j�
(a) the Bonds are not"private activity bonds"as defined in Section 141 of the Code;
(b) the City hereby designates the Bonds as "qualified tax-exempt obligations" for
purposes of Section 265(b)(3)of the Code;
(c) the reasonably anticipated amount of tax-exempt obligations (other than private
activity bonds which are not qualified 501(c)(3) bonds) which will be issued by the City (and all
subordinate entities of the City)during calendar year 2012 will not exceed$10,000,000; and
(d) not more than $10,000,000 of obligations issued by the City during calendar year
2012 have been designated for purposes of Section 265(b)(3)of the Code.
7.05. Procedural Requirements. The City will use its best efforts to comply with any federal
procedural requirements which may apply in order to effectuate the designations made by this section.
Section 8. Book-Entr�ystem; Limited Obligation of Citv.
8.OL The Depository_ Trust CompanX. The Bonds will be initially issued in the form of a
separate single typewritten or printed fully registered Bond for each of the maturities set forth in Section 1.04
hereof. Upon initial issuance, the ownership of each such Bond will be registered in the registration books
kept by the Registrar in the name of Cede&Co.,as nominee for The Depository Trust Company,New York,
New York, and its successors and assigns("DTC"). Except as provided in this section, all of the outstanding
Bonds will be registered in the registration books kept by the Registrar in the name of Cede & Co., as
nominee of DTC.
8.02. Participants. With respect to Bonds registered in the registration books kept by the Registrar
in the name of Cede & Co., as nominee of DTC, the City, the Registrar and the Paying Agent will have no
responsibility or obligation to any broker dealers, banks and other financial institutions from time to time for
which DTC holds Bonds as securities depository (the"Participants") or to any other person on behalf of
which a Participant holds an interest in the Bonds,including but not limited to any responsibility or obligation
with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any
ownership interest in the Bonds, (ii) the delivery to any Participant or any other person (other than a
registered owner of Bonds, as shown by the registration books kept by the Registrar), of any notice with
respect to the Bonds, including any notice of redemption, or(iii)the payment to any Participant or any other
person, other than a registered owner of Bonds, of any amount with respect to principal of, premium, if any,
or interest on the Bonds. The City, the Registrar and the Paying Agent may treat and consider the person in
whose name each Bond is registered in the registration books kept by the Registrar as the holder and absolute
owner of such Bond for the purpose of payment of principal, premium and interest with respect to such Bond,
for the purpose of registering transfers with respect to such Bonds, and for all other purposes. The Paying
Agent will pay all principal of, premium, if any, and interest on the Bonds only to or on the order of the
respective registered owners, as shown in the registration books kept by the Registrar, and all such payments
will be valid and effectual to fully satisfy and discharge the City's obligations with respect to payment of
principal of, premium, if any, or interest on the Bonds to the extent of the sum or sums so paid. No person
other than a registered owner of Bonds, as shown in the registration books kept by the Registrar, will receive
a certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the City
Administrator of a written notice to the effect that DTC has determined to substitute a new nominee in place
of Cede & Co.,the words"Cede & Co."will refer to such new nominee of DTC; and upon receipt of such a
notice,the City Administrator wil]promptly deliver a copy of the same to the Registrar and Paying Agent.
403360v1 JAE SH155-269 1�
8.03. Representation Letter. The City has heretofore executed and delivered to DTC a Blanket
Issuer Letter of Representations (the"Representation Letter") which shall govern payment of principal of,
premium, if any, and interest on the Bonds and notices with respect to the Bonds. Any Paying Agent or
Registrar subsequently appointed by the City with respect to the Bonds will agree to take all action necessary
for all representations of the City in the Representation Letter with respect to the Registrar and Paying Agent,
respectively,to be complied with at all times.
8.04. Transfers Outside Book-Entr�. sY tem. In the event the City, by resolution of the City
Council, determines that it is in the best interests of the persons having beneficial interests in the Bonds that
they be able to obtain Bond certificates, the City will notify DTC, whereupon DTC will notify the
Participants, of the availability through DTC of Bond certificates. In such event the City will issue, transfer
and exchange Bond certificates as requested by DTC and any other registered owners in accordance with the
provisions of this Resolution. DTC may determine to discontinue providing its services with respect to the
Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto under
applicable law. In such event, if no successor securities depository is appointed, the City will issue and the
Registrar will authenticate Bond certificates in accordance with this resolution and the provisions hereof will
apply to the transfer,exchange and method of payment thereof.
8.05. Payments to Cede & Co. Notwithstanding any other provision of this Resolution to the
contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC, payments with
respect to principal of, premium, if any, and interest on the Bond and notices with respect to the Bond will be
made and given, respectively in the manner provided in DTC's Operational Arrangements, as set forth in the
Representation Letter.
Sectio� 9. Continuin�Disclosure.
9.01. Exec�rtion of Continuing Disclosure Certificate. "Continuing Disclosure Certificate"
means that certain Continuing Disclosure Certificate executed by the Mayor, City Administrator, and
Finance Director/City Clerk and dated the date of issuance and delivery of the Bonds, as originally
executed and as it may be amended from time to time in accordance with the terms thereof.
9.02. City Compliance with Provisions of Continuing Disclosure Certificate. The City hereby
covenants and agrees that it will comply with and carry out all of the provisions of the Continuing
Disclosure Certificate. Notwithstanding any other provision of this resolution, failure of the City to
comply with the Contin�ling Disclosure Certificate is not to be considered an event of default with respect
to the Bonds; however, any Bondholder may take such actions as may be necessary and appropriate,
including seeking mandate or specific performance by court order, to cause the City to comply with its
obligations under this section.
Section 10. Defeasance. When all Bonds and all interest thereon have been discharged as
provided in this section,all pledges,covenants and other rights granted by this resolution to the holders of the
Bonds will cease, except that the pledge of the full faith and credit of the City for the prompt and full
payment of the principal of and interest on the Bonds will remain in full force and effect. The City may
discharge all Bonds which are due on any date by depositing with the Registrar on or before that date a sum
sufficient for the payment thereof in fulL If any Bond should not be paid when due, it may nevertheless be
discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest
accrued to the date of such deposit.
403360v1 JAE SH155-269 12
The motion for the adoption of the foregoing resolution was duly seconded by Councilor ,
and upon vote being taken thereon,the following voted in favor thereof:
and the following voted against the same:
whereupon said resolution was declared duly passed and adopted.
403360v1 JAE SH155-269 13
EXHIBIT A
PROPOSALS
403360v1 JAE SH155-269 A-1
EXHIBIT B
FORM OF BOND
No. R- UNITED STATES OF AMERICA $
STATE OF MINNESOTA
COUNTY OF SCOTT
CITY OF SHAKOPEE
GENERAL OBLIGATION IMPROVEMENT REFUNDING BOND
SERIES 2012A
Date of
Rate Maturi Ori�inal Issue CUSIP
% February 1, 20_ June 1,2012
Registered Owner: Cede&Co.
The City of Shakopee, Minnesota, a duly organized and existing municipal corporation in Scott
County, Minnesota(the"City"), acknowledges itself to be indebted and for value received promises to pay to
the Registered Owner specified above or registered assigns, the principal sum of $ on the
maturity date specified above, with interest thereon from the date hereof at the annual rate specified above,
payable February 1 and August 1 in each year, commencing February 1, 2013, to the person in whose name
this Bond is registered at the close of business on the fifteenth day (whether or not a business day) of the
immediately preceding month. The interest hereon and,upon presentation and surrender hereof,the principal
hereof are payable in lawfiil money of the United States of America by check or draft by U.S. Bank National
Association, Saint Paul, Minnesota as Registrar, Paying Agent, Transfer Agent and Authenticating Agent, or
its designated successor �inder the Resolution described herein. For the prompt and fiill payment of such
principal and interest as the same respectively become due, the full faith and credit and taxing powers of the
City have been and are hereby irrevocably pledged.
The City may elect on February 1,2021, and on any day thereafter to prepay Bonds due on or after
February 1,2022. Redemption may be in whole or in part and if in part, at the option of the City and in such
manner as the City will determine. If less than all Bonds of a maturity are called for redemption,the City will
notify The Depository Trust Company ("DTC") of the particular amo�int of such maturity to be prepaid.
DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each
participant will then select by lot the beneficial ownership interests in such maturity to be redeemed.
Prepayments will be at a price of par plus accrued interest.
This Bond is one of an issue in the aggregate principal amount of$4,960,000 all of like original issue
date and tenor, except as to number, maturity date, interest rate, and redemption privilege, all issued pursuant
to a resolution adopted by the City Council on May 15,2012 (the"Resolution"), for the purpose of providing
money to refund in advance of maturity on February l, 2014 (the "Prior Improvement Bonds Redemption
Date") and on February 1, 2015 (the "Prior CIP Bonds Redemption Date") a portion of certain general
obligation bonds of the City, pursuant to and in full confonnity with the Constitution and laws of the State of
Minnesota, including Minnesota Statutes, Chapters 429 and 475, as amended, and Minnesota Statutes,
Sections 475.521 and 475.67, subdivision 13. A portion of the interest hereon is payable until the Prior
403360v 1 JAE SH 155-269 B_1
Improvement Bonds Redemption Date and the Prior CIP Bonds Redemption Date primarily out of an escrow
fund held by an escrow agent and a debt service fund. Thereafter, the principal of and interest on the Bonds
are payable from ad valorem taxes and special assessments, as set forth in the Resolution to which reference
is made for a full statement of rights and powers thereby conferred. The full faith and credit of the City are
irrevocably pledged for payment of this Bond and the City Council has obligated itself to levy additional ad
valorem taxes on all taYable property in the City in the event of any deficiency in ad valorem taxes and
special assessments pledged, which taYes may be levied withotrt limitation as to rate or amount. The Bonds
of this series are issued only as fully registered Bonds in denominations of$5,000 or any integral multiple
thereof of single maturities.
The City Council has designated the issue of Bonds of which this Bond forms a part as "qualified
tax-exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as
amended (the"Code") relating to disallowance of interest expense for financial institutions and within the
$10 million limit allowed by the Code for the calendar year of issue.
As provided in the Resolution and subject to certain limitations set forth therein, this Bond is
transferable upon the books of the City at the principal office of the Registrar, by the registered owner hereof
in person or by the owner's attorney duly a�rthorized in writing, upon surrender hereof together with a written
instrument of transfer satisfactory to the Registrar, duly exec��ted by the registered owner or the owner's
attorney; and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such
transfer or exchange the City will cause a new Bond or Bonds to be issued in the name of the transferee or
registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on
the same date, subject to reimbursement for any t�, fee or governmental charge required to be paid with
respect to such transfer or exchange.
The City and the Registrar may deem and treat the person in whose name this Bond is registered as
the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for
all other purposes,and neither the City nor the Registrar will be affected by any notice to the contrary.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions
and things required by the Constitution and laws of the State of Minnesota to be done, to exist,to happen and
to be performed preliminary to and in the issuance of this Bond in order to make it a valid and binding
general obligation of the City in accordance with its terms,have been done,do exist, have happened and have
been performed as so required, and that the issuance of this Bond does not cause the indebtedness of the City
to exceed any constitutional or statutory limitation of indebtedness.
This Bond is not valid or obligatory for any purpose or entitled to any security or benefit under the
Resolution until the Certificate of Authentication hereon has been executed by the Registrar by manual
signature of one of its authorized representatives.
403360v1 JAE SH155-269 B_2
IN WITNESS WHEREOF,the City of Shakopee, Scott County, Minnesota, by its City Council, has
caused this Bond to be executed on its behalf by the facsimile or manual signatures of the Mayor and City
Administrator and has caused this Bond to be dated as of the date set forth below.
Dated: June 1, 2012
CITY OF SHAKOPEE,MINNESOTA
(Facsimile) (Facsimile)
Mayor City Administrator
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds delivered pursuant to the Resolution mentioned within.
U.S. BANK NATIONAL ASSOCIATION
By
Its Authorized Officer
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this Bond, will be
construed as though they were written out in full according to applicable laws or regulations:
TEN COM --as tenants in common UNIF GIFT MIN ACT
Custodian
(Cust) (M inor)
TEN ENT--as tenants by entireties under Uniform Gifts or Transfers to Minors
Act, State of
JT TEN -- as joint tenants with right of
survivorship and not as tenants in common
Additional abbreviations may also be used though not in the above list.
403360v1 JAE SH155-269 B-3
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
the within Bond and all rights thereunder, and does hereby
irrevocably constitute and appoint attorney to transfer the said Bond on the books kept for
registration of the within Bond,with full power of substitution in the premises.
Dated:
Notice: The assignor's signature to this assignment must correspond with the name as it
appears upon the face of the within Bond in every particular, witho�it alteration or
any change whatever.
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities
Transfer Agent Medallion Program ("STAMP"), the Stock Exchange Medallion Program ("SEMP"), the
New York Stock Exchange, Inc. Medallion Signatures Program ("MSP") or other such "signature guarantee
program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, SEMP or
MSP,all in accordance with the Securities Exchange Act of 1934, as amended.
The Registrar will not effect transfer of this Bond unless the information concerning the assignee
requested below is provided.
Name and Address:
(Include information for all joint owners if this Bond is
held by joint account.)
Please insert social security or other identifying
number of assignee
403360v1 JAE SH155-269 B-4
PROVISIONS AS TO REGISTRATION
The ownership of the principal of and interest on the within Bond has been registered on the books of
the Registrar in the name of the person last noted below.
Signature of
Date of Registration Re�istered Owner Officer of Re isg trar
Cede & Co.
Federal ID#13-2555119
403360v1 JAE SH155-269 B_S
EXHIBIT C
TAX LEVY FOR CIP REFUNDING BONDS
YEAR * TAX LEVY
* Year tax levy collected.
403360v1 JAE SH155-269 C-j
EXHIBIT D-1
NOTICE OF CALL FOR REDEMPTION FOR
PRIOR IMPROVEMENT BONDS
$4,225,000
CITY OF SHAKOPEE, MINNESOTA
GENERAL OBLIGATION IMPROVEMENT BONDS
SERIES 2004A
NOTICE [S HEREBY GIVEN that, by order of the City Council of the City of Shakopee, Scott
County, Minnesota(the"City"),there have been called for redemption and prepayment on
February 1,2014
all outstanding bonds of the City designated as General Obligation Improvement Bonds, Series 2004A, dated
May 1, 2004, having stated maturity dates of February 1 in the years 2015 through 2025, both inclusive,
totaling$1,110,000 in principal amount,and with the following CUSIP numbers:
Year of Maturity Amount CUSIP Number
2015 $195,000 819156 ZL7
2016 95,000 819156 ZMS
2017 95,000 819156 ZN3
2018 95,000 819156 ZP8
2019 95,000 819156 ZQ6
2020 90,000 819156 ZR4
2021 90,000 819156 ZS2
2022 90,000 819156 ZTO
2023 90,000 819156 ZU7
2024 90,000 819156 ZVS
2025 85,000 819156 ZW3
The bonds are being called at a price of par plus accrued interest to February l, 2014, on which date
all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption are
requested to present their bonds for payment at the main office of U.S. Bank National Association, Saint
Paul,Minnesota,on or before February 1,2014,at the following address:
If b.� If b.y hand:
U.S. Bank National Association U.S. Bank National Association
Corporate Trust Services 60 Livingston Avenue
60 Livingston Avenue 3`d Floor—Bond Drop Window
EP-MN-WS3C St. Paul, MN 55107
St. Paul, MN 55107
Important Notice: In compliance with the Economic Growth and TaX Relief Reconciliation Act of
2003, the City is required to withhold a specified percentage of the principal amount of the redemption
403360v1 JAE SH 155-269 D-1-]
price payable to the holder of any Bonds subject to redemption and prepayment on the Redemption Date,
unless the City is provided with the Social Security Number or Federal Employer ldentification Number
of the holder, properly certified. Submission of a fully executed Request for Taxpayer ldentification
Number and Certification, Form W-9 (Rev. December 2011), will satisfy the requirements of this
paragraph.
Additional information may be obtained from:
U.S. Bank National Association
Corporate Trust Division
Bondho(der Relations(800)934-6802
Dated:
BY ORDER OF THE CITY COUNCIL
By /s/ Mark McNeill
City Administrator
City of Shakopee,Minnesota
403360v1 JAE SH155-269 D-1-2
EXHIBIT D-2
NOTICE OF CALL FOR REDEMPTION FOR
PRIOR CIP BONDS
$6,000,000
CITY OF SHAKOPEE,MINNESOTA
GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS
SERIES 2004D
NOTICE IS HEREBY GIVEN that, by order of the City Council of the City of Shakopee, Scott
County,Minnesota(the"City"),there have been called for redemption and prepayment on
February 1,2015
all outstanding bonds of the City designated as General Obligation Capital Improvement Plan Bonds,
Series 2004D, dated November 1, 2004, having stated maturity dates of Febniary 1 in the years 2016 through
2025, both inclusive,totaling$3,580,000 in principal amount,and with the following CUSIP numbers:
Year of Maturity Amount CUSIP Number
2016 $295,000 819156 D72
2017 305,000 819156 D80
2018 320,000 819156 D98
2019 335,000 819156 E22
2020 345,000 819156 E30
202] 360,000 819156 E48
2022 380,000 819156 E55
2023 395,000 819156 E63
2024 415,000 819156 E71
2025 430,000 819156 E89
The bonds are being called at a price of par plus accrued interest to February 1, 2015, on which date
all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption are
requested to present their bonds for payment at the main office of U.S. Bank National Association, Saint
Paul, Minnesota,on or before February 1,2015,at the following address:
If by mail: If b_ hy and:
U.S. Bank National Association U.S. Bank National Association
Corporate Trust Services 60 Livingston Avenue
60 Livingston Avenue 3`d Floor—Bond Drop Window
EP-MN-WS3C St. Paul, MN 55107
St. Paul, MN 55107
Important Notice: In compliance with the Economic Growth and Tax Relief Reconciliation Act of
2003, the City is required to withhold a specified percentage of the principal amount of the redemption
price payable to the holder of any Bonds subject to redemption and prepayment on the Redemption Date,
403360v1 JAE SH155-269 D-2-1
unless the City is provided with the Social Security Number or Federal Employer ldentification Number
of the holder, properly certified. Submission of a fully executed Request for Taxpayer ldentification
Number and Certification, Form W-9 (Rev. December 201 1), will satisfy the requirements of this
paragraph.
Additional information may be obtained from:
U.S. Bank National Association
Corporate Trust Division
Bondholder Relations(800)934-6802
Dated:
BY ORDER OF THE CITY COUNCIL
By /s/ Mark McNeill
City Administrator
City of Shakopee, Minnesota
403360v1 JAE SH155-269 D_2_2
STATE OF MINNESOTA )
)
COUNTY OF SCOTT ) SS.
)
CITY OF SIIAKOPEE )
I, the undersigned, being the duly qualified and acting Deputy City Clerk of the City of Shakopee,
Minnesota(the"City"),do hereby certify that 1 have carefully compared the attached and foregoing extract of
minutes of a regular meeting of the City Council of the City held on May 15,2012,with the original minutes
on file in �ny office and the extract is a full, true and correct copy of the minutes insofar as they relate to the
issuance and sale of the City's General Obligation Improvement Refunding Bonds, Series 2012A, in the
original aggregate principal amo�int of$4,960,000.
WITNESS My hand officially as such Deputy City Clerk and the corporate seal of the City this
day of ,2012.
Deputy City Clerk
Shakopee, Minnesota
(SEAL)
403360v 1 JAE SH I�5-269
STATE OF MINNESOTA CERTIFICATE OF COUNTY AUDITOR
AS TO TAX LEVY AND
COUNTY OF SCOTT REGISTRATION
I, the undersigned County Auditor of Scott County, Minnesota, hereby certify that a certified
copy of a resolution adopted by the governing body of the City of Shakopee, Minnesota (the "City"), on
May 15, 2012, levying taxes for the payment of the City's General Obligation Improvement Refunding
Bonds, Series 2012A, issued in the original aggregate principal amount of $4,960,000, dated
June l, 2012, has been filed in my office and said bonds have been entered on the register of obligations
in my office and that such tax has been levied as required by law.
WITNESS My hand and official seal this day of , 2012.
COUNTY AUDITOR,
SCOTT COUNTY,MINNESOTA
By:
Its:
(SEAL)
403360v1 JAE SH155-269
Extract of Minutes of Meeting
of the City Council of the City of
Shakopee, Scott County, Minnesota
Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of
Shakopee, Minnesota, was duly held in the City Hall in said City on Tuesday, May 15, 2012, commencing at
7:00 P.M.
The following councilors were present
and the following were absent:
* * * * * * * * *
The Mayor announced that the next order of business was consideration of the proposals which had
been received for the purchase of the City's General Obligation Improvement Refunding Bonds,
Series 2012A,to be issued in the original aggregate principal amount of$4,960,000.
The City Administrator presented a tabulation of the proposals which had been received in the
manner specified in the Terms of Proposal for the Bonds. The proposals were as set forth in EXHIBIT A
attached.
After d�ie consideration of the proposals, Councilor then introduced the following
resolution and moved its adoption:
403360v1 JAE SH155-269
g,
OFFICIAL STATEMENT DATED MAY 1, 2012
Rating: Requested from Moody's
REFUNDING ISSUE Investors Service
In the opinion oI Kennedy&Graven,Chartered,Bond Counsel,based on present federal and Minnesota laws,regulations,rulings and decisions(exduding any pending legislation which may
have a retroactive e(/ect),and assuming compliance with certain covenants,interest to be paid on the Bonds is excluded from gross income for federal income tax purposes and,to fhe same
extent,irom taxab/e net income of individuals,estates and trusts for Minnesofa income purposes,and is not a preference item for purposes of computing the federal a/ternative minimum tax or
the Minnesota altemative minimum tax imposed on individuals,frusts,and estates. Such inte2st is taken inro account in determining adjusted current eamings for the purpose of computing
the federal altemative minimum taz imposed on certain corporations and is su6ject fo Minnesota Iranchise taxes on corpora[ions(including financial institutions)measured by income. No
opinion will be expressed by Bond Counsel regarding other state or federa/tax consequences caused by the receipt or accrual of interest on the Bonds or ansing with respect to ownership of
the Bonds. See"TAX EXEMPTION"herein.
$4,960,000*
City of Shakopee, Minnesota
General Obligation Improvement Refunding Bonds, Series 2012A
(Book Entry Only)
Dated date: June 1, 2012 Interest Due: Each February 1 and August 1,
commencing February 1, 2013
The Bonds will mature February 1 as follows:
2015 $215,000 2018 $465,000 2021 $470,000 2024 $495,000
2016 $465,000 2019 $470,000 2022 $480,000 2025 $495,000
2017 $460,000 2020 $465,000 2023 $480,000
Proposals for the Bonds may contain a maturity schedule providing for a combination of serial bonds and term
bonds. All term bonds shall be subject to mandatory sinking fund redemption at a price of par plus accrued
interest to the date of redemption and must conform to the maturity schedule set forth above.
The City may elect on February 1, 2021, and on any day thereafter, to prepay the Bonds due on or after
February 1, 2022 at a price of par plus accrued interest.
The Bonds are general obligations of the City for which the City will pledge its full faith and credit and power to
levy direct general ad valorem taxes. In addition, the City will pledge special assessments against benefited
properties. The proceeds will be used to (i) refund the February 1, 2015 through February 1, 2025 maturities
of the City's General Obligation Improvement Bonds, Series 2004A, dated May 1, 2004; (ii) refund the
February 1, 2016 through February 1, 2025 maturities of the City's General Obligation Capital Improvement
Plan Bonds, Series 2004D, dated November 1, 2004; and (iii) pay the costs associated with the issuance of
the Bonds.
Proposals shall be for not less than $4,917,840 and accrued interest on the total principal amount of the
Bonds. Proposals shall specify rates in integral multiples of 5/100 or 1/8 of 1%. Rates are not required to be
in level or ascending order; however, the rate for any maturity cannot be more than 1% lower than the highest
rate of any of the preceding maturities. Proposals must be accompanied by a good faith deposit in the
amount of $49,600, in the form of a certified or cashier's check payable to the order of the City, a wire
transfer, or a Financial Surety Bond and delivered to Springsted Incorporated prior to the time proposals will
be opened. Award of the Bonds will be on the basis of True Interest Cost (TIC).
The City will designate the Bonds as "qualified tax-exempt obligations" pursuant to Section 265(b)(3) of the
Internal Revenue Code of 1986, as amended, and the Bonds will not be subject to the alternative minimum
tax for individuals.
The Bonds will be issued as fully registered Bonds without coupons and, when issued, will be registered in the
" name of Cede & Co., as nominee of The Depository Trust Company ("DTC"). DTC will act as securities
depository for the Bonds. Individual purchases may be made in book entry form only, in the principal amount
of $5,000 and integral multiples thereof. Investors will not receive physical certificates representing their
interest in the Bonds purchased. (See "Book Entry System" herein.) U.S. Bank National Association, St.
Paul, Minnesota will serve as registrar (the "Registrar") for the Bonds. The Bonds will be available for delivery
at DTC on or about June 14, 2012.
'` Preliminary; subject to change.
PROPOSALS RECEIVED: May 15, 2012 (Tuesday) until 10:00 A.M., Central Time
AWARD: May 15, 2012 (Tuesday) at 7:00 P.M., Central Time
� S p r i n g s t e d Further information may be obtained from SPRINGSTED
Incorporated, Financial Advisor to the City, 380 Jackson Street,
Suite 300,Saint Paul, Minnesota 55101-2887(651)223-3000.
For purposes of compliance with Rule 15c2-12 of the Securities and Exchange Commission,
this document, as the same may be supplemented or corrected by the Issuer from time to time
(collectively, the "Official Statement"), may be treated as an Official Statement with respect to
the Obligations described herein that is deemed final as of the date hereof (or of any such
supplement or correction) by the Issuer, except for the omission of certain information referred
to in the succeeding paragraph.
The Official Statement, when further supplemented by an addendum or addenda specifying the
maturity dates, principal amounts and interest rates of the Obligations, together with any other
information required by law, shall constitute a "Final Official StatemenY' of the Issuer with
respect to the Obligations, as that term is defined in Rule 15c2-12. Any such addendum shall,
on and after the date thereof, be fully incorporated herein and made a part hereof by reference.
By awarding the Obligations to any underwriter or underwriting syndicate submitting a Proposal
therefor, the Issuer agrees that, no more than seven business days after the date of such
award, it shall provide without cost to the senior managing underwriter of the syndicate to which
the Obligations are awarded copies of the Official Statement and the addendum or addenda
described in the preceding paragraph in the amount specified in the Terms of Proposal.
The Issuer designates the senior managing underwriter of the syndicate to which the
Obligations are awarded as its agent for purposes of distributing copies of the Final Official
Statement to each Participating Underwriter. Any underwriter delivering a Proposal with respect
to the Obligations agrees thereby that if its bid is accepted by the Issuer (i) it shall accept such
designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters
of the Obligations for purposes of assuring the receipt by each such Participating Underwriter of
the Final Official Statement.
No dealer, broker, salesman or other person has been authorized by the Issuer to give any
information or to make any representations with respect to the Obligations, other than as
contained in the Official Statement or the Final Official Statement, and if given or made, such
other information or representations must not be relied upon as having been authorized by the
Issuer. Certain information contained in the Official Statement and the Final Official Statement
may have been obtained from sources other than records of the Issuer and, while believed to be
reliable, is not guaranteed as to completeness or accuracy. THE INFORMATION AND
EXPRESSIONS OF OPINION IN THE OFFICIAL STATEMENT AND THE FINAL OFFICIAL
STATEMENT ARE SUBJECT TO CHANGE, AND NEITHER THE DELIVERY OF THE
OFFICIAL STATEMENT OR THE FINAL OFFICIAL STATEMENT NOR ANY SALE MADE
UNDER EITHER SUCH DOCUMENT SHALL CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE ISSUER SINCE THE DATE THEREOF.
References herein to laws, rules, regulations, resolutions, agreements, reports and other
documents do not purport to be comprehensive or definitive. All references to such documents
are qualified in their entirety by reference to the particular document, the full text of which may
contain qualifications of and exceptions to statements made herein. Where full texts of
documents prepared by or on behalf of the Issuer have not been included as appendices to the
Official Statement or the Final Official Statement, they will be furnished on request.
Any CUSIP numbers for the Obligations included in the Final Official Statement are provided for
convenience of the owners and prospective investors. The CUSIP numbers for the Obligations
have been assigned by an organization unaffiliated with the Issuer. The Issuer is not
responsible for the selection of the CUSIP numbers and makes no representation as to the
accuracy thereof as printed on the Obligations or as set forth in the Final Official Statement. No
assurance can be given that the CUSIP numbers for the Obligations will remain the same after
the date of issuance and delivery of the Obligations.
TABLE OF CONTENTS
Pa e s
Termsof Proposal .............................................................................................................. i-v
Introductory Statement........................................................................................................ 1
ContinuingDisclosure......................................................................................................... 1
TheBonds........................................................................................................................... 2
Authorityand Purpose ........................................................................................................ 4
Securityand Financing ....................................................................................................... 5
FutureFinancing................................................................................................................. 5
Litigation.............................................................................................................................. 5
Legality................................................................................................................................ 5
TaxExemption.................................................................................................................... 6
Bank-Qualified Tax-Exempt Bonds..................................................................................... 6
LegislativeProposals.......................................................................................................... 7
Rating.................................................................................................................................. 7
FinancialAdvisor................................................................................................................. 7
Certification......................................................................................................................... 7
CityProperty Values ........................................................................................................... 8
CityIndebtedness ............................................................................................................... 9
City Tax Rates, Levies and Collections .............................................................................. 13
Fundson Hand ................................................................................................................... 14
CityInvestments ................................................................................................................. 14
General Information Concerning the City............................................................................ 14
Governmental Organization and Services .......................................................................... 17
Proposed Form of Legal Opinion .............................................................................. Appendix I
Continuing Disclosure Certificate .............................................................................. Appendix II
Summary of Tax Levies, Payment Provisions, and
Minnesota Real Property Valuation ....................................................................... Appendix III
Excerpt of 2010 Annual Financial Statements .......................................................... Appendix IV
(This page has been left blank intentionally.)
THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE
ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS:
TERMS OF PROPOSAL
$4,960,000�
CITY OF SHAKOPEE, MINNESOTA
GENERAL OBLIGATION IMPROVEMENT REFUNDING BONDS, SERIES 2012A
(BOOK ENTRY ONLY)
Proposals for the Bonds and the Good Faith Deposit ("Deposit") will be received on Tuesday,
May 15, 2012 until 10:00 A.M., Central Time, at the offices of Springsted Incorporated,
380 Jackson Street, Suite 300, Saint Paul, Minnesota, after which time proposals will be opened
and tabulated. Consideration for award of the Bonds will be by the City Council at 7:00 P.M,
Central Time, of the same day.
SUBMISSION OF PROPOSALS
Springsted will assume no liability for the inability of the bidder to reach Springsted prior to the
time of sale specified above. All bidders are advised that each Proposal shall be deemed to
constitute a contract between the bidder and the City to purchase the Bonds regardless of the
manner in which the Proposal is submitted.
(a) Sea/ed Biddinq. Proposals may be submitted in a sealed envelope or by fax
(651) 223-3046 to Springsted. Signed Proposals, without final price or coupons, may be
submitted to Springsted prior to the time of sale. The bidder shall be responsible for submitting
to Springsted the final Proposal price and coupons, by telephone (651) 223-3000 or fax
(651) 223-3046 for inclusion in the submitted Proposal.
OR
(b) Elecfronic Biddin_q. Notice is hereby given that electronic proposals will be received via
PARITYR. For purposes of the electronic bidding process, the time as maintained by PARITY°
shall constitute the official time with respect to all Bids submitted to PARITY°. Each bidder shall
be solely responsible for making necessary arrangements to access PARITY° for purposes of
submitting its electronic Bid in a timely manner and in com�liance with the requirements of the
Terms of Proposal. Neither the City, its agents nor PARITY`R' shall have any duty or obligation to
undertake registration to bid for any prospective bidder or to provide or ensure electronic access
to any qualified prospective bidder, and neither the City, its agents nor PARITY° shall be
responsible for a bidder's failure to register to bid or for any failure in the proper operation of, or
have an� liability for any delays or interruptions of or any damages caused by the services of
PARITY". The City is using the services of PARITY° solely as a communication mechanism to
conduct the electronic bidding for the Bonds, and PARITY° is not an agent of the City.
If any provisions of this Terms of Proposal conflict with information provided by PARITY°, this
Terms of Proposal shall control. Further information about PARITY°, including any fee charged,
may be obtained from:
PARITY°, 1359 Broadway, 2�d Floor, New York, New York 10018
Customer Support: (212) 849-5000
' Preliminary;subject to change.
- i -
DETAILS OF THE BONDS
The Bonds will be dated June 1, 2012 as the date of original issue, and will bear interest
payable on February 1 and August 1 of each year, commencing February 1, 2013. Interest will
be computed on the basis of a 360-day year of twelve 30-day months.
The Bonds will mature February 1 in the years and amounts* as follows:
2015 $215,000 2018 $465,000 2021 $470,000 2024 $495,000
2016 $465,000 2019 $470,000 2022 $480,000 2025 $495,000
2017 $460,000 2020 $465,000 2023 $480,000 '
* The City reserves the right, after proposals are opened and prior to award, to increase or reduce the
principal amount of the Bonds or the maturity amounts offered for sale. Any such increase or �
reduction will be made in mu/tiples of $5,000 in any of the maturities. In the event the principal
amount of the Bonds is increased or reduced, any premium offered or any discount taken by the
successfu/bidder will be increased or reduced by a percentage equal to the percentage by which the
principal amount of the Bonds is increased or reduced.
Proposals for the Bonds may contain a maturity schedule providing for a combination of serial
bonds and term bonds. All term bonds shall be subject to mandatory sinking fund redemption at
a price of par plus accrued interest to the date of redemption and must conform to the maturity
schedule set forth above. In order to designate term bonds, the proposal must specify "Years of
Torm �A4f4irit�o�„ in 4hg en�ro� nrny�uloui �n thA Prr�nncal FnrrT-i.
.+�..... r, r,...,.,.
BOOK ENTRY SYSTEM
The Bonds will be issued by means of a book entry system with no physical distribution of
Bonds made to the public. The Bonds will be issued in fully registered form and one Bond,
representing the aggregate principal amount of the Bonds maturing in each year, will be
registered in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"),
New York, New York, which will act as securities depository of the Bonds. Individual purchases
of the Bonds may be made in the principal amount of $5,000 or any multiple thereof of a single
maturity through book entries made on the books and records of DTC and its participants.
Principal and interest are payable by the registrar to DTC or its nominee as registered owner of
the Bonds. Transfer of principal and interest payments to participants of DTC will be the
responsibility of DTC; transfer of principal and interest payments to beneficial owners by
participants will be the responsibility of such participants and other nominees of beneficial
owners. The purchaser, as a condition of delivery of the Bonds, will be required to deposit the
Bonds with DTC.
REGISTRAR
The City will name the registrar which shall be subject to applicable SEC regulations. The City
will pay for the services of the registrar.
OPTIONAL REDEMPTION
The City may elect on February 1, 2021, and on any day thereafter, to prepay Bonds due on or
after February 1, 2022. Redemption may be in whole or in part and if in part at the option of the
City and in such manner as the City shall determine. If less than all Bonds of a maturity are
called for redemption, the City will notify DTC of the particular amount of such maturity to be
prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to
be redeemed and each participant will then select by lot the beneficial ownership interests in
such maturity to be redeemed. All prepayments shall be at a price of par plus accrued interest.
- ii -
SECURITY AND PURPOSE
The Bonds will be general obligations of the City for which the City will pledge its full faith and
credit and power to levy direct general ad valorem taxes. In addition, the City will pledge special
assessments against benefited properties. The proceeds will be used to (i) refund the February
1, 2015 through February 1, 2025 maturities of the City's General Obligation Improvement
Bonds, Series 2004A, dated May 1, 2004; (ii) refund the February 1, 2016 through February 1,
2025 maturities of the City's General Obligation Capital Improvement Plan Bonds,
Series 2004D, dated November 1, 2004; and (iii) pay the costs associated with the issuance of
the Bonds.
BIDDING PARAMETERS
Proposals shall be for not less than $4,917,840 and accrued interest on the total principal
amount of the Bonds.
No proposal can be withdrawn or amended after the time set for receiving proposals unless the
meeting of the City scheduled for award of the Bonds is adjourned, recessed, or continued to
another date without award of the Bonds having been made. Rates shall be in integral multiples
of 5/100 or 1/8 of 1%. Rates are not required to be in level or ascending order; however, the
rate for any maturity cannot be more than 1% lower than the highest rate of any of the
preceding maturities. Bonds of the same maturity shall bear a single rate from the date of the
Bonds to the date of maturity. No conditional proposals will be accepted.
GOOD FAITH DEPOSIT
Proposals, regardless of inethod of submission, shall be accompanied by a Deposit in the
amount of $49,600, in the form of a certified or cashier's check, a wire transfer, or Financial
Surety Bond and delivered to Springsted Incorporated prior to the time proposals will be
opened. Each bidder shall be solely responsible for the timely delivery of their Deposit whether
by check, wire transfer or Financial Surety Bond. Neither the City nor Springsted Incorporated
have any liability for delays in the transmission of the Deposit.
Any Deposit made by certified or cashier's check should be made payable to the City and
delivered to Springsted Incorporated, 380 Jackson Street, Suite 300, St. Paul, Minnesota
55101.
Any Deposit sent via wire transfer should be sent to Springsted Incorporated as the City's
agent according to the following instructions:
Wells Fargo Bank, N.A., San Francisco, CA 94104
ABA#121000248
for credit to Springsted Incorporated, Account#635-5007954
Ref: Shakopee, MN Series 2012A Good Faith Deposit
Contemporaneously with such wire transfer, the bidder shall send an e-mail to
bond services(a�sprinqsted.com, including the following information; (i) indication that a wire
transfer has been made, (ii) the amount of the wire transfer, (iii) the issue to which it applies,
and (iv) the return wire instructions if such bidder is not awarded the Bonds.
Any Deposit made by the successful bidder by check or wire transfer will be delivered to the City
following the award of the Bonds. Any Deposit made by check or wire transfer by an
unsuccessful bidder will be returned to such bidder following City action relative to an award of
the Bonds.
- iii -
If a Financial Surety Bond is used, it must be from an insurance company licensed to issue
such a bond in the State of Minnesota and pre-approved by the City. Such bond must be
submitted to Springsted Incorporated prior to the opening of the proposals. The Financial
Surety Bond must identify each underwriter whose Deposit is guaranteed by such Financial
Surety Bond. If the Bonds are awarded to an underwriter using a Financial Surety Bond, then
that underwriter is required to submit its Deposit to the City in the form of a certified or cashier's
check or wire transfer as instructed by Springsted Incorporated not later than 3:30 P.M., Central
Time on the next business day following the award. If such Deposit is not received by that time,
the Financial Surety Bond may be drawn by the City to satisfy the Deposit requirement.
The Deposit received from the purchaser, the amount of which will be deducted at settlement, •
will be deposited by the City and no interest will accrue to the purchaser. In the event the
purchaser fails to comply with the accepted proposal, said amount will be retained by the City.
AWARD
The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true
interest cost (TIC) basis. The City's computation of the interest rate of each proposal, in
accordance with customary practice, will be controlling.
The City will reserve the right to: (i)waive non-substantive informalities of any proposal or of
matters relating to the receipt of proposals and award of the Bonds, (ii) reject all proposals
without cause, and (iii) reject any proposal that the City determines to have failed to comply with
the terms herein.
BOND INSURANCE AT PURCHASER'S OPTION
If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment
therefor at the option of the underwriter, the purchase of any such insurance policy or the
issuance of any such commitment shall be at the sole option and expense of the purchaser of
the Bonds. Any increased costs of issuance of the Bonds resulting from such purchase of
insurance shall be paid by the purchaser, except that, if the City has requested and received a
rating on the Bonds from a rating agency, the City will pay that rating fee. Any other rating
agency fees shall be the responsibility of the purchaser.
Failure of the municipal bond insurer to issue the policy after Bonds have been awarded to the
purchaser shall not constitute cause for failure or refusal by the purchaser to accept delivery on
the Bonds.
CUSIP NUMBERS
If the Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the
Bonds, but neither the failure to print such numbers on any Bond nor any error with respect
thereto will constitute cause for failure or refusal by the purchaser to accept delivery of the
Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers
shall be paid by the purchaser.
SETTLEMENT
Within 40 days following the date of their award, the Bonds will be delivered without cost to the
purchaser through DTC in New York, New York. Delivery will be subject to receipt by the
purchaser of an approving legal opinion of Kennedy & Graven, Chartered of Minneapolis,
Minnesota, and of customary closing papers, including a no-litigation certificate. On the date of
settlement, payment for the Bonds shall be made in federal, or equivalent, funds that shall be
received at the offices of the City or its designee not later than 12:00 Noon, Central Time.
Unless compliance with the terms of payment for the Bonds has been made impossible by
- iv -
action of the City, or its agents, the purchaser shall be liable to the City for any loss suffered by
the City by reason of the purchaser's non-compliance with said terms for payment.
CONTINUING DISCLOSURE
In accordance with SEC Rule 15c2-12(b)(5), the City will undertake, pursuant to the resolution
awarding sale of the Bonds, to provide annual reports and notices of certain events. A
descrip'tion oi inis undertaicing is set forth in the Official Statement. The purchaser's obligation
to purchase the Bonds will be conditioned upon receiving evidence of this undertaking at or
prior to delivery of the Bonds.
OFFICIAL STATEMENT
' The City has authorized the preparation of an Official Statement containing pertinent information
relative to the Bonds, and said Official Statement will serve as a nearly final Official Statement
within the meaning of Rule 15c2-12 of the Securities and Exchange Commission. For copies of
the Official Statement or for any additional information prior to sale, any prospective purchaser
is referred to the Financial Advisor to the City, Springsted Incorporated, 380 Jackson Street,
Suite 300, Saint Paul, Minnesota 55101, telephone (651) 223-3000.
The Official Statement, when further supplemented by an addendum or addenda specifying the
maturity dates, principal amounts and interest rates of the Bonds, together with any other
information required by law, shall constitute a "Final Official StatemenY' of the City with respect
to the Bonds, as that term is defined in Rule 15c2-12. By awarding the Bonds to any
underwriter or underwriting syndicate submitting a proposal therefor, the City agrees that, no
more than seven business days after the date of such award, it shall provide without cost to the
senior managing underwriter of the syndicate to which the Bonds are awarded 50 copies of the
Official Statement and the addendum or addenda described above. The City designates the
senior managing underwriter of the syndicate to which the Bonds are awarded as its agent for
purposes of distributing copies of the Final Official Statement to each Participating Underwriter.
Any underwriter delivering a proposal with respect to the Bonds agrees thereby that if its
proposal is accepted by the City (i) it shall accept such designation and (ii) it shall enter into a
contractual relationship with all Participating Underwriters of the Bonds for purposes of assuring
the receipt by each such Participating Underwriter of the Final Official Statement.
Dated April 17, 2012 BY ORDER OF THE CITY COUNCIL
/s/ Julie Linnihan
Finance Director/City Clerk
- v -
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OFFICIAL STATEMENT
$4,960,000*
CITY OF SHAKOPEE, MINNESOTA
GENERAL OBLIGATION IMPROVEMENT REFUNDING BONDS, SERIES 2012A
(BOOK ENTRY ONLY)
INTRODUCTORY STATEMENT
This Official Statement contains certain information relating to the City of Shakopee, Minnesota
(the "City" or the "Issuer") and its issuance of $4,960,000' General Obligation Improvement
Refunding Bonds, Series 2012A (the "Bonds," the "Obligations" or the "Issue"). The Bonds are
general obligations of the City for which the City pledges its full faith and credit and power to
levy direct general ad valorem taxes. In addition, the City will pledge special assessments
against benefited properties.
Inquiries may be directed to Ms. Julie Linnihan, Finance Director/City Clerk, City of Shakopee,
129 South Holmes Street, Shakopee, Minnesota 55379, by telephoning (952) 233-9326, or via
email at jlinnihan@ci.shakopee.mn.us. Inquiries may also be made to Springsted Incorporated,
380 Jackson Street, Suite 300, St. Paul, Minnesota 55101-2887, or by telephoning
(651) 223-3000.
CONTINUING DISCLOSURE
In order to assist the Underwriters in complying with SEC Rule 15c2-12 promulgated by the
Securities and Exchange Commission, pursuant to the Securities Exchange Act of 1934, as the
same may be amended from time to time, and official interpretations thereof (the "Rule"),
pursuant to the resolution awarding the sale of the Bonds (the "Award Resolution"), the City has
entered into an undertaking (the "Undertaking") for the benefit of holders including beneficial
owners of the Bonds to provide certain financial information and operating data relating to the
City to the Electronic Municipal Market Access system ("EMMA") annually, and to provide
notices of the occurrence of certain events enumerated in the Rule to EMMA or the Municipal
Securities Rulemaking Board ("MSRB"). The specific nature of the Undefaking, as well as the
information to be contained in the annual report or the notices of material events is set forth in
the Continuing Disclosure Certificate to be executed and delivered by the City at the time the
Bonds are delivered in substantially the forms attached hereto as Appendix II.
The City, in the past five years, has never failed to comply in all material respects with any
previous undertakings under the Rule to provide annual reports or notices of material events. A
failure by the City to comply with the Undertaking will not constitute an event of default on the
Bonds (although holders will have any available remedy at law or in equity). Nevertheless, such
a failure must be reported in accordance with the Rule and must be considered by any broker,
dealer or municipal securities dealer before recommending the purchase or sale of the Bonds in
the secondary market. Consequently, such a failure may adversely affect the transferability and
liquidity of the Bonds and their market price.
i The City reserves the right, after proposals are opened and prior to award, to increase or reduce the
principal amount of the Bonds offered for sale. Any such increase or reduction will be made in
mu/tiples of $5,000 in any of the maturities. In the event the principal amount of the Bonds is
increased or reduced, any premium offered or any discount taken by the successful bidder will be
increased or reduced by a percentage equal to the percentage by which the principal amount of the
Bonds is increased or reduced.
- 1 -
THEBONDS
General Description
The Bonds are dated as of June 1, 2012 and will mature in the amounts and on the dates
shown on the front cover of this Official Statement. The Bonds are being issued in book entry
form. Interest on the Bonds is payable on February 1 and August 1 of each year, commencing
February 1, 2013. Interest on the Bonds will be payable to the holder (initially Cede & Co.)
registered on the books of the Registrar as of the fifteenth day of the calendar month next
preceding such interest payment date. Principal of and interest on the Bonds will be paid as •
described in the section herein entitled "Book Entry System." U.S. Bank National Association,
St. Paul, Minnesota will serve as Registrar for the Bonds. The City will pay for registration
services. �
Optional Redemption
The City may elect on February 1, 2021, and on any day thereafter, to prepay the Bonds due on
or after February 1, 2022. Redemption may be in whole or in part and if in part at the option of
the City and in such manner as the City shall determine. If less than all Bonds of a maturity are
called for redemption, the City will notify DTC of the particular amount of such maturity to be
prepaid. DTC will determine by lot the amount of each participanYs interest in such maturity to
be redeemed and each participant will then select by lot the beneficial ownership interests in
such maturity to be redeemed. All prepayments shall be at a price of par plus accrued interest.
Book Entry System
The Depository Trust Company ("DTC"), New York, New York, will act as securities depository
for the Obligations. The Obligations will be issued as fully-registered securities registered in the
name of Cede 8� Co. (DTC's partnership nominee) or such other name as may be requested by
an authorized representative of DTC. One fully-registered certificate will be issued for each
maturity of the Obligations, each in the aggregate principal amount of such maturity, and will be
deposited with DTC.
DTC is a limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A
of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for securities
that its participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade
settlement among Direct Participants of sales and other securities transactions in deposited
securities through electronic computerized book-entry transfers and pledges between Direct
Participants' accounts. This eliminates the need for physical movement of securities
certificates. Direct Participants include securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of
The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC,
National Securities Clearing Corporation, and Fixed Income Clearing Corporation all of which
are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries.
Access to the DTC system is also available to others such as securities brokers and dealers,
banks, trust companies and clearing corporations that cfear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The
DTC Rules applicable to its Participants are on file with the Securities and Exchange
Commission. More information about DTC can be found at www.dtcc.com.
- 2 -
Purchases of Obligations under the DTC system must be made by or through Direct
Participants, which will receive a credit for the Obligations on DTC's records. The ownership
interest of each actual purchaser of each Obligation ("Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to
receive written confirmations providing details of the transaction, as well as periodic statements
of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner
entered into the transaction. Transfers of ownership interests in the Obligations are to be
accomplished by entries made on the books of Direct and Indirect Participants acting on behalf
of Beneficial Owners. Beneficial Owners will not receive certificates representing their
ownership interests in the Obligations, except in the event that use of the book-entry system for
the Obligations is discontinued.
To facilitate subsequent transfers, all Obligations deposited by Direct Participants with DTC are
registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may
be requested by an authorized representative of DTC. The deposit of Obligations with DTC and
their registration in the name of Cede & Co. or such other DTC nominee do not effect any
change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the
Obligations; DTC's records reflect only the identity of the Direct Participants to whose accounts
such Obligations are credited, which may or may not be the Beneficial Owners. The Direct and
Indirect Participants will remain responsible for keeping account of their holdings on behalf of
their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct
Participants to Indirect Participants, and by Direct Participants and Indirect Participants to
Beneficial Owners will be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time. Beneficial Owners of Obligations
may wish to take certain steps to augment the transmission to them of notices of significant
events with respect to the Obligations, such as redemptions, tenders, defaults, and proposed
amendments to the Obligation documents. For example, Beneficial Owners of the Obligations
may wish to ascertain that the nominee holding the Obligations for their benefit has agreed to
obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may
wish to provide their names and addresses to the registrar and request that copies of the
notices be provided directly to them.
Redemption notices are required to be sent to DTC. If less than all of the Obligations within a
maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of
each Direct Participant in such maturity to be redeemed.
Neither DTC nor Cede & Co. (nor any such other DTC nominee) will consent or vote with
respect to the Obligations unless authorized by a Direct Participant in accordance with DTC's
procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer or Bond
Registrar as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the Obligations are
credited on the record date (identified in a listing attached to the Omnibus Proxy).
Redemption proceeds, distributions, and dividend payments on the Obligations will be made to
Cede & Co. or such other nominee as may be requested by an authorized representative of
DTC. DTC's practice is to credit Direct Participants' accounts, upon DTC's receipt of funds and
corresponding detail information from the Issuer or its agent on the payable date in accordance
with their respective holdings shown on DTC's records. Payments by Participants to Beneficial
Owners will be governed by standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of such Participant and not of DTC, Agent, the Bond Registrar, or the
Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time.
Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such
other nominee as may be requested by an authorized representative of DTC) is the
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responsibility of the Bond Registrar, Issuer, or the Issuer's agent. Disbursement of such
payments to Direct Participants will be the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
A Beneficial Owner shall give notice to elect to have its Obligations purchased or tendered,
through its Participant, to Agent, and shall effect delivery of such Obligations by causing the
Direct Participant to transfer the Participant's interest in the Obligations, on DTC's records, to
Agent. The requirement for physical delivery of Obligations in connection with an optional
tender or a mandatory purchase will be deemed satisfied when the ownership rights in the
Obligations are transferred by Direct Participants on DTC's records and followed by a book-
entry credit of tendered Obligations to Trustee's DTC account.
DTC may discontinue providing its services as securities depository with respect to the
Obligations at any time by giving reasonable notice to the Issuer or its agent. Under such
circumstances, in the event that a successor securities depository is not obtained, certificates
are required to be printed and delivered.
The Issuer may decide to discontinue use of the system of book-entry-only transfers through
DTC (or a successor securities depository). In that event, certificates will be printed and
delivered to DTC.
The information in this section concerning DTC and DTC's book-entry system has been
obtained from sources that the Issuer believes to be reliable, but the Issuer takes no
responsibility for the accuracy thereof.
AUTHORITY AND PURPOSE
The Bonds are being issued pursuant to Minnesota Statutes, Chapters 429 and 475. Proceeds
of the Bonds will be used to (i) refund the February 1, 2015 through February 1, 2025 maturities
(the "Series 2004A Refunded Maturities") of the City's General Obligation Improvement Bonds,
Series 2004A, dated May 1, 2004 (the "Series 2004A Bonds") (the "Improvement Refunding
Portion"); (ii) refund the February 1, 2016 through February 1, 2025 maturities (the
"Series 2004D Refunded Maturities") of the City's General Obligation Capital Improvement Plan
Bonds, Series 2004D, dated November 1, 2004 (the "Series 2004D Bonds") (the "CIP
Refunding Portion"); and (iii) pay the costs associated with the issuance of the Bonds.
The Series 2004A Refunded Maturities and the Series 2004D Refunded Maturities are
collectively referred to as the "Refunded Maturities." The Series 2004A Bonds and the
Series 2004D Bonds are collectively referred to as the "Refunded Bonds."
The composition of the Bonds is as follows:
Improvement CIP
Refunding Refunding
Portion Portion Total
Sources of Funds:
Principal Amount $1,160,000 $3,800,000 $4,960,000
Total Sources of Funds $1,160,000 $3,800,000 $4,960,000
Uses of Funds:
Depositto Escrow Fund $1,135,098 $3,724,033 $4,859,131
Costs of Issuance 15,042 43,667 58,709
Allowance for Discount Bidding 9,860 32,300 42,160
Total Uses of Funds $1,160,000 $3,800,000 $4,960,000
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The refunding is being conducted to achieve debt service savings and has been structured as a
crossover refunding. The proceeds of the Bonds will be placed in an escrow account with U.S.
Bank National Association in Saint Paul, Minnesota. The amount in the escrow account will be
invested in special obligations of the United States Treasury or other obligations of the United
States or of its agencies, which shall mature in such amounts and at such times as to be
available to (i) pay the interest on the Improvement Refunding Portion of the Bonds to and
including February 1, 2014 the call date of the Series 2004A Bonds; (ii) pay the interest on the
CIP Refunding Portion of the Bonds to and including February 1, 2015, the call date of the
Series 2004D Bonds; (iii) redeem the Series 2004A Refunded Maturities and the Series 2004D
Refunded Maturities on their respective call dates at a price of par plus accrued interest; and
(iv) pay the costs associated with the issuance of the Bonds.
Verification services necessary to insure the adequacy of the escrow account to provide timely
payment of the principal and interest for which the escrow account is obligated will be
performed by a certified public accounting firm.
SECURITY AND FINANCING
The Bonds will be general obligations of the City for which the City pledges its full faith and
credit and power to levy direct general ad valorem taxes. In addition, the City will pledge special
assessments filed against benefited properties previously pledged to the Series 2004A Bonds
for repayment of the Improvement Refunding Portion of the Bonds. The City expects to make
its first levy (i) for the Improvement Refunding Portion of the Bonds in 2013 for collection in
2014; and (ii) for the CIP Refunding Portion of the Bonds in 2014 for collection in 2015. The
escrow account established with the proceeds of the Bonds will make the interest payments due
on the Improvement Refunding Portion of the Bonds and the CIP Refunding Portion of the
Bonds through the respective call dates as noted above. Thereafter, each year's collections of
taxes and special assessments, if collected in full, will be sufficient to pay 105% of the interest
payment due on August 1 of the collection year and the principal and interest payment due
February 1 of the following year.
FUTURE FINANCING
The City does not anticipate any additional borrowing for at least the next 90 days.
LITIGATION
The City is not aware of any threatened or pending litigation affecting the validity of the Bonds or
the City's ability to meet its financial obligations.
LEGALITY
The Bonds are subject to approval as to certain matters by Kennedy & Graven, Chartered, of
Minneapolis, Minnesota as Bond Counsel. Bond Counsel has not participated in the
preparation of this Official Statement, except for the following "Tax Exemption" section, and will
not pass upon its accuracy, completeness, or sufficiency. Bond Counsel has not examined nor
attempted to examine or verify any of the financial or statistical statements or data contained in
this official Statement and will express no opinion with respect thereto. A legal opinion in
substantially the form set out as Appendix I to this Official Statement will be delivered at closing.
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TAX EXEMPTION
In the opinion of Bond Counsel, under existing statutes, regulations, rulings and decisions, interest
on the Bonds is not included in the gross income of the owners thereof for purposes of federal
income taxation and is not included in net taxable income of individuals, estates or trusts for
purposes of State of Minnesota income taxation.
The Internal Revenue Code of 1986, as amended (the "Code") imposes an alternative minimum
tax with respect to individuals and corporations on alternative minimum taxable income. Interest
on the Bonds will not be treated as a preference item in calculating alternative minimum taxable
income. However, such interest is taken into account in determining adjusted current earnings
for the purpose of computing the federal alternative minimum tax imposed on certain
corporations and is subject to Minnesota franchise taxes on corporations (including financial
institutions) measured by income.
Noncompliance following the issuance of the Bonds with certain requirements of the Code and
covenants of the Award Resolution may result in the inclusion of interest on the Bonds in gross
income for federal tax purposes and net taxable income for State of Minnesota income tax
purposes of the owners thereof. No provision has been made for redemption of the Bonds, or
for an increase in the interest rate on the Bonds, in the event that interest on the Bonds
becomes subject to federal or State of Minnesota income taxation.
The Code provides that in the case of an insurance company subject to the tax imposed by
Section 831 of the Code, the amount which otherwise would be taken into account as "losses
incurred" under Section 832(b)(5) shall be reduced by an amount equal to 15% of the interest
on the Bonds that is received or accrued during the taxable year.
Interest on the Bonds may be included in the income of a foreign corporation for purposes of the
branch profits tax imposed by Section 884 of the Code. Under certain circumstances, interest
on the Bonds may be subject to the tax on "excess net passive income" of S corporations
imposed by Section 1375 of the Code.
The above is not a comprehensive list of all federal tax consequences which may arise from the
receipt of interest on the Bonds. The receipt of interest on the Bonds may othen�vise affect the
federal or State of Minnesota income tax liability of the recipient based on the particular taxes to
which the recipient is subject and the particular tax status of other items or deductions. Bond
Counsel expresses no opinion regarding any such consequences. All prospective purchasers
of the Bonds are advised to consult their own tax advisors as to the tax consequences of, or tax
considerations for, purchasing or holding the Bonds.
BANK-QUALIFIED TAX-EXEMPT OBLIGATIONS
The City will designate the Bonds as "qualified tax-exempt obligations" for purposes of
Section 265(b)(3) of the Internal Revenue Code of 1986, as amended, relating to the ability of
financial institutions to deduct from income for federal income tax purposes, interest expense
that is allocable to carrying and acquiring tax-exempt obligations.
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LEGISLATIVE PROPOSALS
Bond Counsel's opinion is given as of its date and Bond Counsel assumes no obiigation to
update, revise, or supplement such opinion to refiect any changes in facts or circumstances or
any changes in law that may hereafter occur. Proposals are regularly introduced in both the
United States House of Representatives and the United States Senate that, if enacted, could
alter or affect the tax-exempt status of municipal bonds. For example, legislation has been
proposed by President Obama that would, among other things, limit the amount of exclusions
(including tax-exempt interest) or deductions that certain higher-income taxpayers could use to
reduce their tax liability. The likelihood of adoption of this or any other such legislative proposal
relating to tax-exempt bonds cannot be reliably predicted. If enacted into law, current or future
proposals may have a prospective or retroactive effect and could affect the value or
marketability of tax-exempt bonds (including the Bonds). Prospective purchasers of the Bonds
should consult their own tax advisors regarding the impact of any such change in law.
RATI N G
Application for a rating of the Bonds has been made to Moody's Investors Service ("Moody's"), 7
World Trade Center, 250 Greenwich Street, 23`d Floor, New York, New York. If a rating is
assigned, it will reflect only the opinion of Moody's. Any explanation of the significance of the
rating may be obtained only from Moody's.
There is no assurance that a rating, if assigned, will continue for any given period of time, or
that such rating will not be revised or withdrawn if, in the judgment of Moody's, circumstances
so warrant. A revision or withdrawal of the rating may have an adverse effect on the market
price of the Bonds.
FINANCIAL ADVISOR
The City has retained Springsted Incorporated, Public Sector Advisors, of St. Paul, Minnesota,
as financial advisor (the "Financial Advisor") in connection with the issuance of the Bonds. In
preparing the Official Statement, the Financial Advisor has relied upon governmental officials,
and other sources, who have access to relevant data to provide accurate information for the
Official Statement, and the Financial Advisor has not been engaged, nor has it undertaken, to
independently verify the accuracy of such information. The Financial Advisor is not a public
accounting firm and has not been engaged by the City to compile, review, examine or audit any
information in the Official Statement in accordance with accounting standards. The Financial
Advisor is an independent advisory firm and is not engaged in the business of underwriting,
trading or distributing municipal securities or other public securities and therefore will not
participate in the underwriting of the Bonds.
CERTIFICATION
The City has authorized the distribution of this Official Statement for use in connection with the
initial sale of the Bonds. As of the date of the settlement of these Bonds, the Purchaser will be
furnished with a certificate signed by the appropriate officers of the City. The certificate will
state that as of the date of the Official Statement, the Official Statement did not and does not as
of the date of the certificate contain any untrue statement of material fact or omit to state a
material fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
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CITY PROPERTY VALUES
2011/12 Property Values
The decline in the City's taxable market value is partially caused by a legislated change in the
computation of taxable market value. The change was made to offset the elimination of a
homestead credit that provided property tax relief for certain homesteads. To minimize the
impact of eliminating the credit, it was replaced with a new "market value homestead exclusion"
or MVHE. The MVHE reduces the taxable market value of a homestead with an estimated
market value of up to $413,800 so that the resultant property tax attempts to mimic the previous
property tax net of the now eliminated homestead credit. A homestead that qualifies for the
MVHE will cause a drop in the City's taxable market value even if the estimated market value of
the same property does not decline.
2011/12 Indicated Market Value of Taxable Property: $3,363,999,799*
* Indicated market value is calculated by dividing the City's taxable market value of$3,347,179,800 by
the 2010 sales ratio of 99.5% for the City as determined by the State Department of Revenue. (The
2011 sales ratio is not yet available.) Excludes mobile home valuation of$82,100.
2011/12 Taxable Net Tax Capacity: $40,413,937*
2011/12 Net Tax Capacity $41,988,858
Less: Captured Tax Increment Tax Capacity (155,002)
Contribution to Fiscal Disparities (6,431,112)
Plus: Distribution from Fiscal Disparities 5,011,193
2011/12 Taxable Net Tax Capacity $40,413,937
� Exc/udes the mobile home valuation of$892.
2011/12 Taxable Net Tax Capacity by Class of Property�al
Real Estate:
Residential Homestead $24,795,112 61.4%
Commercial/Industrial, Public Utility,
and Railroad� 14,764,455 36.5
Seasonal/Recreational and Other 37,429 0.1
Agricultural 404,090 1.0
Personal Property 412,851 1.0
Total $40,413,937 100.00%
� Reflects adjustments for fiscal disparities and captured tax increment tax capacity.
- 8 -
Trend of Values
Indicated Taxable Taxable Net
Market Value�al Market Value Tax Capacity�b�
2011/12 $3,363,999,799 $3,347,179,800 $40,413,937
2010/11 3,588,009,548 3,570,069,500 42,517,503
2009/10 3,782,085,670 3,695,097,700 43,808,282
2008/09 3,961,513,580 3,850,591,200 45,195,077
2007/08 4,095,684,806 3,800,795,500 43,851,703
(a1 Indicated market values are calculated by dividing the City's taxable market value by the sales ratio
determined for the City each year by the State Department of Revenue.
�b� See Appendix lll for an explanation of taxable net tax capacity and the Minnesota property tax
system.
Ten of the Largest Taxpayers in the City
2011/12 Net
Taxpayer Tvpe of Propertv Tax Capacitv
Xcel Energy Utility $ 537,082
Rahr Malting Co. Malting Company 407,838
Seagate Technology Inc. Computer Hardware 399,250
St. Francis Regional Medical Center Health Care 358,500
Shakopee Crossings LP Residential/Commercial 357,420
Ryan Companies US Inc. Commercial/Industrial 332,700
Canterbury Park Holding Co. Horse Racing Track 324,236
Certain Teed Products Corp. Manufacturer 319,250
Inland Shake Valley Marketplace Retail 315,750
Wal-Mart Real Estate Retail 315,250
Total $3,667,276*
* Represents 9.1% of the City's 2011/12 taxab/e net tax capacity.
CITY INDEBTEDNESS
Legal Debt Limit*
Legal Debt Limit (3% of Taxable Market Value) $100,415,394
Less: Outstanding Debt Subject to Limit (Including the
CIP Refunding Portion and Excluding the
Series 2004D Refunded Maturities) (5,680,000)
Legal Debt Margin at June 1, 2012 $ 94,735,394
" The/egal debt margin is referred to statutorily as the "Net Debt LimiY'and permits debt to be offset by
debt service funds and current revenues which are applicable to the payment of debt in the current
fisca/year. To conservatively state the legal debt margin, no such offset has been used to increase
the margin as shown above.
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General Obligation Debt Supported by Taxes�al
Principal
Date Original Final Outstanding
of Issue Amount Purqose Maturity As of 6-1-12
5-1-04 $2,275,000 Fire Station Refunding 2-1-2017 $1,055,000
11-1-04 6,000,000 Capital Improvement (Public Works) 2-1-2015 825,OOO�b�
6-1-12 3,800,000 Capital Improvement Refunding (the
CIP Refunding Portion of the Bonds) 2-1-2025 3,800,000
Total $5,680,000
�a1 These issues are subject to the lega/debt limit.
�b� Excludes the Series 2004D Refunded Maturities.
General Obligation Debt Supported by Taxes and/or Special Assessments
Principal
Date Original Final Outstanding
of Issue Amount Purpose Maturitv As of 6-1-12
5-1-04 $4,225,000 Locallmprovements 2-1-2014 $ 555,000*
11-1-04 2,570,000 Locallmprovements 2-1-2015 770,000
7-1-06 3,440,000 Locallmprovements 2-1-2017 1,820,000
2-1-07 1,370,000 Locallmprovements 2-1-2017 825,000
9-1-07 1,445,000 Locallmprovements 2-1-2018 895,000
9-1-08 2,170,000 Locallmprovements 2-1-2019 1,425,000
8-1-10 1,555,000 Locallmprovements 2-1-2021 1,335,000
6-1-12 1,160,000 Improvements Refunding (the
Improvement Portion of the Bonds) 2-1-2025 1,160,000
Total $8,785,000
x Excludes the Series 2004A Refunded Maturities.
General Obligation Debt Supported by Revenues
Principal
Date Original Final Outstanding
of Issue Amount Purpose Maturitv As of 6-1-12
7-15-06 $3,360,000 River City Centre-Housing
Refunding 2-1-2027 $ 2,675,OOO�a�
7-15-06 905,000 River City Centre-Retail Refunding
(Taxable) 2-1-2018 630,OOO�a�
7-15-06 1,125,000 River City Centre-Retail Refunding 2-1-2024 1,225,OOO�a�
4-15-12 5,885,000 Northridge Apartments Refunding 2-1-2034 5,885,OOO�b1
Total $10,415,000
�a� These issues were so/d by the CDA to finance a combination housing and retail project located in the
City. These issues are being repaid from revenues of the project and tax increment collections.
�b� These bonds were sold by the Scott County Community Development Agency (the "CDA') to
refinance a senior housing project in the City. The bonds are being repaid from project revenues and
a portion of the CDA's special benefits tax. The bonds are a general obligation of both Scott County
and the City.
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Revenue Debt*
Principal
Date Original Final Outstanding
of Issue Amount Purpose Maturitv As of 6-1-12
5-1-03 $ 3,385,000 Utility Improvements Refunding 8-1-2018 $ 1,805,000
10-1-04 9,830,000 Utility Improvements Refunding 2-1-2028 8,725,000
11-1-06 10,570,000 Utility Improvements Refunding 2-1-2030 9,560,000
Total $20,090,000
" These issues were sold by the Shakopee Public Utilities Commission to finance capital
improvements, replacements and additions to the electric and water utilities comprising the Shakopee
Public Utilities.
Annual Calendar Year Debt Service Payments Including The Bonds
and Excluding the Refunding Maturities
G.O. Debt Supported
G.O. Debt by Taxes and/or
Supported bv Taxes Sqecial Assessments
Principal Principal
Year Principal & Interest�a� Princiqal & Interest�b�
2012 (at 6-1) (Paid) $ 111,082 (Paid) $ 159,479
2013 $ 460,000 674,323 $1,610,000 1,901,254
2014 475,000 671,983 1,575,000 1,795,481
2015 500,000 637,049 1,540,000 1,692,931
2016 575,000 657,215 1,130,000 1,239,076
2017 580,000 650,008 1,115,000 1,185,205
2018 360,000 421,490 605,000 646,123
2019 370,000 426,450 450,000 474,748
2020 370,000 420,530 240,000 255,003
2021 380,000 423,870 180,000 189,840
2022 390,000 426,270 90,000 96,690
2023 395,000 423,080 85,000 89,810
2024 410,000 429,390 85,000 87,898
2025 415,000 424,960 80,000 80,960
Total $5,680,000��� $6,797,700 $8,785,OOO�d1 $9,894,498
�a1 Includes the CIP Refunding Portion of the Bonds at an assumed average annual interest rate of
1.97%and excludes the Series 2004D Refunded Maturities.
(b1 Includes the Improvement Refunding Portion of the Bonds at an assumed average annual interest
rate of 1.81% and excludes the Series 2004A Refunded Maturities.
(�1 78.5%of this debt will be retired within ten years.
�d� 97.2%of this debt will be retired within ten years.
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Annual Calendar Year Debt Service Payments Including The Bonds
and Excluding the Refunding Maturities (Continued)
G.O. Debt Supported
bv Revenues Revenue Debt
Principal Principal
Year Principal & Interest Principal & Interest
2012 (at 6-1) (Paid) $ 106,286 $ 230,000 $ 662,474
2013 $ 285,000 741,696 825,000 1,669,512
2014 390,000 778,029 875,000 1,686,044
2015 485,000 856,173 890,000 1,662,913
2016 505,000 855,073 950,000 1,683,413
2017 535,000 862,759 985,000 1,676,675
2018 550,000 855,281 1,015,000 1,664,790
2019 580,000 861,919 1,035,000 1,635,431
2020 605,000 861,506 1,130,000 1,685,550
2021 630,000 861,046 1,175,000 1,681,975
2022 660,000 865,416 1,220,000 1,676,081
2023 685,000 863,544 1,275,000 1,677,609
2024 575,000 728,896 1,350,000 1,695,531
2025 505,000 638,669 1,400,000 1,684,875
2026 520,000 634,700 1,450,000 1,671,516
2027 545,000 639,606 1,430,000 1,587,516
2028 305,000 383,119 1,365,000 1,460,469
2029 315,000 381,703 725,000 774,328
2030 330,000 385,819 765,000 781,734
2031 340,000 384,300
2032 350,000 382,225
2033 360,000 379,575
2034 360,000 366,525
Total $10,415,OOO�a1 $14,673,865 $20,090,OOO�b� $28,718,436
�a� 50.2% of this debt will be retired within ten years.
�b� 45.3%of this debt will be retired within ten years.
Indirect General Obligation Debt
Debt Applicable to
2011/12 Taxable G.O. Debt Tax Caqacitv in City
Taxinq Unit Net Tax Capacitv As of 6-1-12�a1 Percent Amount
Scott County $ 149,310,077 $ 74,430,000 27.1% $ 20,170,530
ISD No. 720 (Shakopee) 48,344,273 134,320,000 70.5 94,695,600
ISD No. 191 (Burnsville-
Eagan-Savage) 69,270,503 96,710,000 1.9 1,837,490
Metropolitan Council 3,312,664,247�b) 14,795,000��� 1.2 177,540
Total $116,881,160
�a1 Excludes general obligation tax and aid certificates, general obligation debt supported by revenues
and revenue debt. Includes annual appropriation lease obligations.
�b1 2010/11 taxab/e net tax capacity value; 2011/12 value is not yet available.
��� Excludes general obligation debt payable from waste water revenues, 911 user fees, housing rental
payments, transit revenue debt, and general obligation grant anticipation notes. Includes certificates
of participation.
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Debt Ratios*
G.O. G.O. Indirect &
Direct Debt Direct Debt
2011/12 Indicated Market Value ($3,363,999,799) 0.43% 3.90%
Per Capita (37,076 —2011 Metropolitan Council Estimate) $390 $3,543
' Excludes general obligation debt supported by revenues and revenue debt.
CITY TAX RATES, LEVIES AND COLLECTIONS
Tax Capacity Rates for a City Resident in
Independent School District No. 720 (Shakopee)
2011/12
For
2007/08 2008/09 2009/10 2010/11 Total Debt Onlv
Scott County 32.646% 32.684% 33.237% 35.541% 38.802% 5.357%
City of Shakopee�a� 31.925 32.630 33.710 34.731 36.655 0.340
ISD No. 720 (Shakopee)�b1 26.103 27.274 29.471 31.182 35.512 30.973
Special Districts��� 4.642 5.060 4.731 4.691 5.329 0.547
Total 95.316% 97.648% 101.149% 106.145 116.298% 37.217%
�a� The City also has a 2011/12 tax rate of 0.00345% spread on the market va/ue of property in support
of debt service.
�b� Independent School District No. 720 (Shakopee) also has a 2011/12 tax rate of 0.12513% spread on
the market value of property in support of an excess operating levy.
��� Special districts include the Shakopee Economic Development Authority, Scott County Community
Development Agency, Metropolitan Council, Metropolitan Transit, Mosquito Control, and the Lower
Minnesota Watershed District.
NOTE.• Property taxes are determined by multip/ying the net tax capacity by the tax capacity rate, plus
multiplying the referendum market va/ue by the market value rate. This table does not include
the market va/ue based rates. See Appendix lll.
Tax Levies and Collections
Collected During Collected and/or Abated
Collection Year as of 12-31-11
Levv/Collect Net Levv* Amount Percent Amount Percent
2011/12 $14,835,937 (In Process of Collection)
2010/11 14,241,751 $14,005,998 98.3% $14,064,012 98.8%
2009/10 14,359,661 13,986,543 97.4 14,318,711 99.7
2008/09 14,451,711 14,177,309 98.1 14,424,695 99.8
2007/08 13,715,015 13,355,089 97.4 13,705,633 99.9
* The net/evy excludes state aid for property tax relief and fiscal disparities, if applicable. The net/evy
is the basis for computing the tax capacity rates. See Appendix lll.
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FUNDS ON HAND
As of March 31, 2012
Fund Cash and Investments
General $ 6,298,211
Special Revenue 2,200,138
Debt Service:
G.O. Tax Levy 258,668
G.O. Special Assessment 2,045,971
Capital Projects 8,080,748
Enterprise 30,815,753*
Internal Service 16,748,479
Trust and Agency 1,832,534
Total $68,280,502
* Excludes Shakopee Public Uti/ities Commission cash and investments.
CITY INVESTMENTS
Safety of principal is the foremost objective of the City's investment program. Investments shall
be undertaken in a manner that seeks to ensure the preservation of capital in the overall
portfolio. The objective will be to mitigate credit risk and interest rate risk.
The investment portfolio shall remain sufficiently liquid to meet all operating requirements that
may be reasonably anticipated. This is accomplished by structuring the portfolio so that
securities mature concurrent with cash needs to meet anticipated demands (static liquidity).
Furthermore, since all possible cash demands can not be anticipated, the portfolio should
consist largely of securities with active secondary or resale markets (dynamic liquidity).
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. Return on investment is of least importance compared to the safety and
liquidity objectives described above. The core of investments are limited to relatively low risk
securities in anticipation of earning a fair return relative to the risk being assumed.
As of March 31, 2012, the market value of the City's investments, excluding the Shakopee
Public Utilities Commission investments, totaled $68,021,370, including treasury securities
purchased at a discount and accruing interest. Of the City's total investments, approximately
35% of the investments will mature in less than one year (including government mutual funds
and money market funds) and 55% will mature in one to five years.
GENERAL INFORMATION CONCERNING THE CITY
The City is located in northeastern Scott County, approximately 25 miles southwest of the City
of Minneapolis. The City is the Scott County seat and is part of the Minneapolis/St. Paul
seven-county metropolitan area. The Minnesota River forms the City's northern boundary. The
City encompasses an area of 29 square miles, since having annexed 340 acres in Jackson
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Township in November 2006. The City's population has been increasing rapidly in recent years,
as shown below.
U.S. Census
Year Population Percent Increase
2011 37,076' 0.0%
2010 37,076 80.3
2000 20,568 75.2
1990 11,739 18.1
1980 9,941 44.6
1970 6,876 ---
* Metropolitan Council estimate.
Major Employers in the City
Approximate
Number
Emplover ProducUService of Employees
Seagate Technology Inc. Computer equipment manufacturing 1,595
Valleyfair Amusement park 1,600'
Independent School District No. 720 Education 1,090
St. Francis Regional Medical Center Health care 1,000
Canterbury Park Off-site horse racing 750
Scott County County government 700
Northstar Auto Auction Motor vehicle sales 350
Anchor Glass Container Corp. Glass container manufacturing 279
Minnesota Correctional
Facility-Shakopee Women's correctional facility 259
Toro Company Turf care products 240
Vertis Communications Printing 225
CertainTeed Corp. Asphalt shingles manufacturing 217
City of Shakopee City government 168
K-Mart Distribution Center Retail distributor 160
Shakopee Friendship Manor Corp. Nursing home 105
* Atseasona/peak
Source: Telephone survey of individual employers, March and April 2012.
Labor Force Data
March 2012 March 2011
Civilian Unemployment Civilian Unemployment
Labor Force Rate Labor Force Rate
City of Shakopee 21,893 5.8% 20,458 6.9%
Scott County 74,347 6.1 75,127 6.5
Minneapolis/St. Paul MSA 1,850,346 6.1 1,840,311 6.8
State of Minnesota 2,960,071 6.5 2,962,624 7.2
Source: Minnesota Department of Employment and Economic Development,
http:l/www.positrvelyminnesota.com. 2012 data are preliminary.
- 15 -
City-Issued Building Permits
Total Permits New Sinqle Familv Homes
Number Value Number Value
2012 (to 3-31) 186 $ 10,533,418 19 $ 5,268,775
2011 1,881 63,903,326 118 32,215,056
2010 1,078 83,306,549 160 40,688,474
2009 1,102 118,974,366 314 64,988,799
2008 1,020 49,694,699 94 23,625,243
2007 1,194 86,698,306 138 38,719,897
2006 1,131 125,677,330 223 57,995,337
2005 1,512 224,302,132 352 84,367,302
2004 1,639 198,362,382 396 97,880,471
2003 1,744 191,634,443 384 79,508,416
2002 1,310 149,473,123 260 55,243,745
Recent Development
The City's residential growth continues, although at a slower rate since the onset of the recent
recession. 40 new lots were approved in 2009, with 6 lots approved in 2010, and no new lots
approved in 2011. This is reflective of the changes in residential growth throughout the
geographic area surrounding the City.
The City's 2030 Comprehensive Plan (the "Plan") was adopted in 2009 after it was approved for
implementation by the Metropolitan Council. This document guides the City's growth and
development over the next 18 years. The Plan covers land use, transportation, infrastructure
such as sanitary sewers, water, surface water management and housing, open space
development and economic development.
In 2003 and 2005, Ryan Companies developed the 270+ acre Dean Lakes Planned Unit
Development (PUD). The Dean Lakes area contains residential, retail/commercial and
industrial/business park development, including such companies as QLogic and Open Systems.
A proposal for a 179,000 square foot manufacturing/headquarters building at this site is moving
through the City's various approval processes.
Independent School District No. 720 (Shakopee) recently completed construction of Jackson
Elementary, which opened in the fall of 2011. St. Francis Medical Center completed a
$44 million expansion in 2006 and has also constructed an addition for clinic expansion.
St. Gertrude's has recently constructed an expansion of a long-term care facility, which is
located on the St. Francis medical campus. New City park developments have been initiated
with the Westminster Park site being completed in late 2011, the Riverside Fields Park to be
constructed in 2012; Green Meadows Park, initiated in 2011, to be completed in 2012. These
neighborhood parks, upon completion will provide updated facilities for newly built residential
areas.
Financial Institutions
Citizens State Bank of Shakopee is a full-service bank located in the City. Branches of Voyager
Bank, Wells Fargo Bank, National Association, KleinBank, Prime Security Bank, TCF National
Bank, Paragon Bank, and M & I Bank are also located in the City.
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Health Care Facilities
St. Francis Regional Medical Center, a general and acute care hospital with 93 beds and
16 infant bassinets, is located in the City. The Center has a medical staff of approximately
804 active or affiliated physicians. The Center's total full- and part-time employment is
approximately 1,000.
Also located in the City are Shakopee Friendship Manor, an 80-bed nursing home, and
St. Gertrude's Health Center, a 75-bed nursing home.
Source: Minnesota Department of Health, http://www.health.stafe.mn.us/divs/fpc/directory/fpcdir.html.
Education
Most City residents are part of Independent School District No. 720 (Shakopee), while a small
percentage of City residents are within the boundaries of Independent School District No. 191
(Burnsville-Eagan-Savage). Independent School District No. 720 has a 2011/12 enrollment
(grades kindergarten through 12) of approximately 7,427 students and has approximately
1,090 employees.
Shakopee Area Catholic School provides parochial education for grades kindergarten through
eight. The school has a 2011/12 enrollment of approximately 758 students. Living Hope
Lutheran School has 80 students in grades kindergarten through four.
Source: Minnesota Department of Education, http://cfl.state.mn.us/datactr/.
GOVERNMENTAL ORGANIZATION AND SERVICES
Organization
Shakopee was incorporated as a City in 1870 and became a statutory city in April 1975. The
City has a Mayor-Council form of government, with the Mayor elected to a two-year term of
office and the four Council members elected to overlapping four-year terms. The present Mayor
and Council members are as shown below:
Expiration of Term
Brad Tabke Mayor December 31, 2013
Steven Clay Council Member December 31, 2013
Matt Lehman Council Member December 31, 2015
Pamela Punt Council Member December 31, 2013
Jay Whiting Council Member December 31, 2015
The City's chief administrative officer is the City Administrator who is appointed by the City
Council. Mr. Mark McNeill was appointed to this position in July of 1996. Prior to that,
Mr. McNeill was the City Administrator in Mason City, lowa for two years and in Savage,
Minnesota for ten years. Mr. McNeill holds a B.A. degree in political science and a Master's
degree in public affairs.
Ms. Julie Linnihan, the City's Finance Director/City Clerk, has been with the City since 2011.
Ms. Linnihan previously worked for the cities of Waseca, Dayton and New Hope, Minnesota.
The City has 168 employees.
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Services
Police and fire protection for the City is provided by the Police Department, which is authorized
to staff up to 47 full-time officers. The City has a paid on-call Fire Department authorized to
staff up to 48 members. The City has a class 5 rating for insurance purposes.
The Shakopee Public Utilities Commission is the governing body of the electric utility and
responsible for the management, operation and maintenance of the municipal electric
distribution system and water system. The electric utility purchases power from Minnesota
Municipal Power Agency (MMPA) and has 16,314 metered customers. The Commission is
composed of five members appointed by the City Council to three-year terms. The Commission
makes an annual contribution in lieu of taxes to the City and also contributes free electricity for
City street lighting. The Commission has five electric substations in operation to service its
territory which includes the City, portions of the Townships of Jackson and Louisville, and part
of the City of Prior Lake lying north of Prior Lake and between Pike Lake Trail and County
Road 18/Crest Avenue and abutting the City.
Municipal water and sewer services are provided for all developed areas of the City. Water is
supplied by 18 wells and stored in a two million gallon standpipe, a 25,000 gallon sphere, a
1 million gallon hydro pillar, a 500,000 gallon spheroid, and two 2.5 million gallon tanks. The
water system has a pumping capacity of 13,750 gallons per minute; average demand is
estimated to be 4.8 million gallons per day, while the historic peak demand is 14.680 million
gallons per day.
Interceptor sewer lines and wastewater treatment plants in the seven-county metropolitan area
are under the jurisdiction of the Metropolitan Council's Environmental Services ("MCES").
MCES finances its operations through user charges based on volume.
Employee Pensions
All full-time and certain part-time employees of the City of Shakopee are covered by defined
benefit pension plans administered by the Public Employees Retirement Association of
Minnesota (PERA). PERA administers the General Employers Retirement Fund (GERF) and
the Public Employees Police and Fire Fund (PEPFF) which are cost-sharing multiple-employer
retirement plans. GERF members belong to either the Coordinated Plan or the Basic Plan.
Coordinated members are covered by Social Security and Basic members are not. All new
members must participate in the Coordinated Plan. All police officers who qualify for
membership by statute are covered by the PEPFF. The City's contributions for the past five
years are as follows:
GERF PEPFF
2011 (unaudited) $353,579 $500,257
2010 549,973 475,396
2009 516,529 484,519
2008 481,929 415,440
2007 452,967 359,836 '
For more information regarding the liability of the City with respect to its employees, please
reference "Note 13, Defined Benefit Pension Plans — State-Wide," of the City's Comprehensive
Annual Financial Report for fiscal year ended December 31, 2010, an excerpt of which is
included as Appendix IV of this Official Statement. (The City's Comprehensive Annual Report
for the fiscal year ended December 31, 2011 is not yet available.)
- 18 -
The City contributes to the Shakopee Fire Department Relief Association, a single-employer
public employee retirement system that acts as a common investment and administrator for the
City's volunteer fire fighters. Total contributions to the Association for the past five years are as
follows:
2011 (unaudited) $351,976
2010 339,752
2009 224,770
2008 187,451
2007 210,301
Other Post-Employment Benefits
The Governmental Accounting Standards Board (GASB) has issued Statement No. 45,
Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than
Pensions (GASB 45), which addresses how state and local governments must account for and
report their obligations related to post-employment healthcare and other non-pension benefits
(referred to as Other Post Employment Benefits or"OPEB").
The City provides health insurance for retired City employees and officials who meet
PERA eligibility requirements and have been employed by the City. This coverage also extends
to the retiree's family. As of December 31, 2011, the City has 11 participants. The City
currently finances the plan on a pay-as-you-go basis. During the fiscal year ended
December 31, 2011, the City expended $45,723 for these benefits. Under GASB 45 such costs
must be accounted for on an accrual basis.
Components of the City's annual OPEB cost, the amount actually contributed to the plan, and
the changes in the City's net OPEB obligation to the plan for the fiscal year ended
December 31, 2011 are as follows:
Annual required contribution $211,306
Interest on net OPEB obligation 23,164
Adjustment to annual required contribution 3( 3,490)
Annual OPEB cost (expense) $200,980
Less: Contributions made 45 723)
Increase in net OPEB obligation $155,257
Net OPEB obligation — beginning of year 579 104
Net OPEB obligation — end of year 734 361
The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and
the net OPEB obligation for the past four years are as follows:
Fiscal Year Annual Employer Percentage Net OPEB
Ended OPEB Cost Contribution Contributed Obliqation
December 31, 2011 (unaudited) $200,980 $45,723 23% $734,361
December 31, 2010 170,040 27,020 16 579,104
December 31, 2009 250,175 54,644 22 436,084
December 31, 2008 240,553 -- 0 24,553
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The retiree benefits discussed above are the City's only OPEB. The City must report an annual
OPEB cost based on actuarially determined amounts that, if paid on an ongoing basis, will
provide sufficient resources to pay these benefits as they come due. The City may establish its
OPEB liability at zero as of the beginning of the initial year of implementation; however, the
unfunded actuarial liability is required to be amortized over future periods.
For more information concerning the City's OPEB obligations, please reference "Note 16 — Post
Employment Health Care Plan," of the City's Comprehensive Annual Financial Report for fiscal
year ended December 31, 2010, an excerpt of which is included as Appendix IV to this Official
Statement. (The City's Comprehensive Annual Financial Report for the fiscal year ended
December 31, 2011 is not yet available.)
General Fund Budget Summary
2010 2011 2012
Actual Unaudited Budqet
Revenues:
Property Taxes $ 13,557,007 $ 14,279,016 $ 13,407,920
Special Assessments 28,988 21,905 13,000
Licenses & Permits 1,303,896 1,225,560 1,275,300
Intergovernmental 828,906 796,076 749,560
Charges for Services 1,855,276 3,879,113 1,792,030
Fines and Forfeitures 423,746 357,249 436,000
Miscellaneous 420,697 397,477 345,000
Total Revenues $ 18,418,516 $ 20,956,396 $ 18,018,810
Expenditures:
General Government $ 2,970,611 $ 2,774,859 $ 3,277,807
Public Safety 8,975,356 9,401,915 9,747,231
Public Works 2,632,925 2,629,581 2,878,352
Culture and Recreation 4,075,920 3,868,583 3,992,281
Economic Development 70,019 - 85,000
Miscellaneous - - 140,000
Total Expenditures $ 18,724,831 $ 18,674,938 $ 20,120,671
Excess Revenues
Over(Under) Expenditures (306,315) 2,281,458 (2,101,861)
Other Financing Sources (Uses)
Other Sources 2,233,806 122,400 2,322,400
Other Uses (4,390,000) (2,137,394) -
Total Other Financing Sources (Uses) $ (2,156,194) $ (2,014,994) $ 2,322,400
Net Change in Fund Balances $ (2,462,509) $ 266,464 $ 220,539
Fund Balance- Beginning $ 11,502,280 $ 9,039,771 $ 9,306,235
Fund Balance- Ending $ 9,039,771 $ 9,306,235 $ 9,526,774
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APPENDIX I
PROPOSED FORM OF LEGAL OPINION
1j'����� Offices in 470 U.S. Bank Plaza
1�, 200 South Sixth Street
Minneapolis Minneapolis MN 55402
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Saint Paul (612)337-9300 telephone
p (612)337-9310 fax
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Affirmative Action Equal Opportunity Employcr
CHARTERED
$
General Obligation Improvement Refunding Bonds
Series 2012A
City of Shakopee
Scott County, Minnesota
We have acted as bond counsel to the City of Shakopee, Minnesota (the "Issuer") in
connection with the issuance by the Issuer of its General Obligation Improvement Refunding Bonds,
Series 2012A (the "Bonds"), originally dated as of June _, 2012, and issued in the original aggregate
principal amount of$ . In such capacity and for the purpose of rendering this opinion we have
examined certified copies of certain proceedings, certifications and other documents, and applicable laws
as wc have deemed necessary. Regarding qucstions of fact material to this opinion, we havc relied on
certificd proceedings and other certifications of public officials and other documents furnished to us
without undertaking to verify the same by independent investigation. Under existing laws, regulations,
rulings and decisions in effect on the date hereof, and based on the foregoing we are of the opinion that:
1. The Bonds have been duly authorized and executed, and are valid and binding general
obligations of the Issuer, enforceable in accordance with their terms.
2. The principal of and interest on the Bonds are payablc from special assessments and ad
valorem taxes, but if necessary for the payment thereof additional ad valorem taxes are required by law to
be levied on all taxable property of the Issuer, which taxes are not subject to any limitation as to rate or
amount.
3. lnterest on the Bonds is excludable from gross income of the recipient far federal income
tax purposes and, to the same cxtent, is excludable from taxable net income of individuals, trusts, and
estates for Minnesota income tax purposes, and is not a preference item for purposes of the computation
of the federal alternative minimum tax, or the computation of the Minnesota alternative minimum tax
imposed on individuals, trusts and estates. However, such interest is taken into account in determining
adjusted current earnings for the purpose of computing the federal alternative minimum tax imposed on
certain corporations and is subject to Minnesota franchise taxes on corporations (including financial
institutions) measured by income. The opinion set forth in this paragraph is subject to the condition that
the Issuer comply with all requircments of the Internal Revenue Code of 1986, as amended, that must be
satisficd subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be,
excludable from gross income for federal income tax purposes and from taxable net income for Minnesota
income tax purposes. The Issuer has covenanted to comply with all such requirements. Failure to comply
with certain of such requirements may cause interest on the Bonds to be included in gross income for
federal income tax purposes and taxable net income for Minnesota income tax purposes rctroactively to
I-1
the date of issuance of the Bonds. We express no opinion regarding tax consequences arising with
respect to the Bonds other than as expressly set forth herein.
4. The rights of the owners of the Bonds and the enforceability of the Bonds may be limited
by bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditor's rights
generally and by equitable principles, whether considered at law or in equity.
We have not been asked and have not undertaken to review the accuracy, completeness or
sufficiency of the Official Statement or other offering material relating to the Bonds, and accordingly
we express no opinion with respect thereto.
This opinion is given as of the date hereof and we assume no obligation to update, revise, or
supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention
or any changes in law that may hereafter occur.
Dated June_, 2012, at Minneapolis, Minnesota.
I-2
APPENDIX II
CONTINUING DISCLOSURE CERTIFICATE
$
City of Shakopee,Minncsota
General Obligation Improvement Rcfunding Bonds
Scrics 2012A
June ,2012
This Continuing Disclosure Certificate(the"Disclosure Certificate") is executed and delivered by the
Ciry of Shakopee, Minnesota (the "Issuer") in connection with the issuancc of its General Obligation
Improvement Refunding Bonds, Series 2012A (the`Bonds") in the original aggregate principal amount of
$ . The Bonds are being issued pursuant to resolutions adopted by the City Council of the Issuer
(the"Resolutions"). The Bonds are being delivered to (the "Purchaser") on the date
hereof. Pursuant to the Resolutions, the Issuer has covenanted and agrecd to provide continuing disclosure of
certain financial information and operating data and timely notices of thc occurrence of certain events. The
Issuer hereby covenants and agrees as follows:
Section l. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed
and delivered by the Issuer for the benefit of the Holders (as detined hcrcin)of the Bonds in order to provide
for the public availability of such information and assist the Participating Undcnvritcr(s)(as defined herein) in
complying with the Rule (as defined hercin). This Disclosurc Ccrtiticatc, together with the Resolutions,
constitutes the written agreement or contract for the benefit of the Holders of the Bonds that is required by the
Rule.
Section 2. Definitions. In addition to the defined tcrms set forth in the Resolutions, which
apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the
following capitalized terms shall have the following meanings:
"Annual Report" means any annual report provided by the Issucr pursuant to, and as described in,
Sections 3 and 4 of this Disclosure Certificate.
"Audited Financial Statements" means annual financial statements of the Issucr, prepared in
accordance with generally accepted accounting principles for governmental units ("GAAP") as prescribed by
the Governmental Accounting Standards Board("GASB").
"Bonds" means the General Obligation Improvement Refunding Bonds, Series 2012A, issued by the
Issuer in the original aggregate principal amount of$
"Disclosure Certificate"means this Continuing Disclosure Certificate.
"EMMA" means the Electronic Municipal Market Access systcm operated by the MSRB and
designated as a nationally recognized municipal securities information repository and the exclusive portal for
complying with the continuing disclosure requirements of the Rule.
"Final Official Statement" means the deemed final Official Statement dated , 2012, as
supplemented by the Addendum, dated , 2012, which constitutes the final official statement
delivered in connection with the Bonds,which is available from the MSRB.
"Fiscal Year"means the fiscal year of the Issuer.
II-1
"Holder"means the person in whose name a Bond is registered or a beneficial owner of such a Bond.
"Issuer" means the City of Shakopee, Minnesota, which is the obligated person with respect to the
Bonds.
"Material Event"means any of the events listed in Section 5(a)of this Disclosure Certificate.
"MSRB" means the Municipal Securities Rulemaking Board located at 1900 Duke Street, Suite 600,
Alexandria,VA 22314.
"Participating Underwriter" means any of the original underwriter(s) of the Bonds (including the
Purchaser)required to comply with the Rule in connection with the offering of the Bonds.
"Purchaser"means
"Repository"means EMMA,or any successor thereto designated by the SEC.
"Rule" means SEC Rule 15c2-12(b)(5) promulgated by the SEC under the Securities Exchange Act
of 1934, as the same may be amended from time to time, and including written interpretations thereof by the
SEC.
"SEC"means Securities and Exchange Commission,and any successor thereto.
Section 3. Provision of Annual Financial Information and Audited Financial Statements.
(a) The Issuer shall provide to the Repository, as soon as available,but not later than twelve(12)
months after the end of the Fiscal Year commencing with the year that ends December 31, 2011, an Annual
Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual
Report may be submitted as a single document or as separate documents comprising a package, and may
cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the
Audited Financial Statements of the Issuer may be submitted separately from the balance of the Annual
Report and will be submitted as soon as available.
(b) If the Issuer is unable or fails to provide to the Repository an Annual Report by the date
required in subsection(a),the Issuer shall send a notice of that fact to the Repository and the MSRB.
(c) The Issuer shall determine each year prior to the date for providing the Annual Report the
name and address of each Repository.
Section 4. Content of Annual Reports. The Issuer's Annual Report shall contain or incorporate
by reference the following sections of the Final Official Statement:
1. City Property Values
2. Ciry Indebtedness
3. City Tax Rates, Levies and Collections
In addition to the items listed above, the Annual Report shall include Audited Financial Statements
submitted in accordance with Section 3 of this Disclosure Certificate.
Any or all of the items listed above may be incorporated by reference from other documents,
including official statements of debt issues of the Issuer or related public entities, which have been submitted
to the Repository or the SEC. If the document incorporated by reference is a final official statement, it must
I I-2
also be available from the MSRB. The Issuer shall clearly identify each such other document so incorporated
by reference.
Section 5. Reporting of Material Evcnts.
(a) This Section 5 shall govern the giving of notice of the occurrence of any of the following
events ("Material Events")with respect to the Bonds:
1. Principal and interest payment delinquencies;
2. Non-payment related defaults, if material;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final
determinations of taxability, Notices of Proposed Issue (IRS Form 5701—TEB), or other
material notices or determinations with respect to the tax status of the security, or other
material events affecting the tax status of the security;
7. Modifications to rights of security holders, if material;
8. Bond calls, if material, and tender offers;
9. Defeasances;
10. Rclease, substitution, or sale of property securing repayment of the securities, if material;
11. Rating changes;
12. Bankruptcy, insolvency, receivership or similar event of the obligated person;
13. The consummation of a merger, consolidation, or acquisition involving an obligated
person or the sale of all or substantially all of the assets of the obligated person, other
than in the ordinary course of business, the entry into a definitive agreement to undertake
such an action ar the termination of a definitive agreement relating to any such actions,
other than pursuant to its terms, if material; and
14. Appointment of a successor or additional trustee or the change of name of a trustee, if
material.
(b) The Issuer shall file a notice of such occurrence with the Repository or with the MSRB
within ten(10)business days of the occurrence of the Material Event.
(c) Unless othcrwise required by law and subject to technical and economic feasibiliry,the Issuer
shall employ such methods of information transmission as shall be requested or recommended by the
designated recipients of the Issuer's information.
Section 6. EMMA. The SEC has designated EMMA as a nationally recognized municipal
securities information repository and the exclusive portal for complying with the continuing disclosure
I I-3
requirements of the Rule. Until the EMMA system is amended or altered by the MSRB and the SEC, the
Issuer shall make all filings required under this Disclosure Certificate solely with EMMA.
Section 7. Termination of Reportin� a�tion. The Issuer's obligations under the
Resolutions and this Disclosure Certificate shall terminate upon [the legal defeasance,] the redemption in full
of all Bonds or payment in full of all Bonds.
Section 8. A�ent. The Issuer may, from time to time, appoint or engage a dissemination agent
to assist it in carrying out its obligations under the Resolutions and this Disclosure Certificate, and may
discharge any such agent,with or without appointing a successor dissemination agent.
Section 9. Amendment; Waiver. Notwithstanding any other provision of the Resolutions or
this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this
Disclosure Certificate may be waived, if such amendment or waiver is supported by an opinion of nationally
recognized bond counsel to the effect that such amendment or waiver would not, in and of itself, cause a
violation of the Rule. The provisions of the Resolutions requiring continuing disclosure pursuant to the Rule
and this Disclosure Certificate, or any provision hereof, shall be null and void in the event that the Issuer
delivers to the Repository an opinion of nationally recognized bond counsel to the effect that those portions of
the Rule which impose the continuing disclosure requirements of the Resolutions and the execution and
delivery of this Disclosure Certificate are invalid, have been repealed retroactively or otherwise do not apply
to thc Bonds. The provisions of the Resolutions requiring continuing disclosure pursuant to the Rule and this
Disclosure Certificate may be amended without the consent of the Holders of the Bonds, but only upon the
delivery by the Issuer to the Repository of the proposed amendment and an opinion of nationally recognized
bond counsel to the effect that such amendment, and giving effect thereto, will not adversely affect the
compliance with the Rule.
Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to
prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this
Disclosure Certificate or any other means of communication, or including any other information in any
Annual Report or notice of occurrence of a Material Event, in addition to that which is required by this
Disclosure Certificate. If the Issuer chooses to include any information in any Annual Report or notice of
occurrence of a Material Event in addition to that which is specifically required by this Disclosure Certificate,
the Issuer shall have no obligation under this Disclosure Certificate to update such information or include it in
any future Annual Report or notice of occurrence of a Material Event.
Section ll. Default. In the event of a failure of thc Issucr to comply with any provision of this
Disclosure Certificate any Holder of the Bonds may take such actions as may be necessary and appropriate,
including seeking mandamus or specific performance by court order, to cause the Issucr to comply with its
obligations under the Resolutions and this Disclosure Certificate. A default under this Disclosure Certificate
shall not be deemed an event of default with respect to the Bonds and the sole remedy under this Disclosure
Certificate in the event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action
to compel performance.
Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the
Issuer, the Participating Underwriters, and the Holders from time to time of the Bonds, and shall crcate no
rights in any other person or entity.
(The rcmainder of this page is intentionally left blank.)
I I-4
IN WITNESS WHEREOF, wc have executed this Disclosure Certificate in our official capacities
effective as of the date and year first written above.
CITY OF SHAKOPEE,MINNESOTA
Mayor
(SEAL)
City Administrator
I I-5
(This page has been left blank intentionally.)
APPENDIX III
SUMMARY OF TAX LEVIES, PAYMENT PROVISIONS, AND
MINNESOTA REAL PROPERTY VALUATION
(effective through levy year 2011/payable year 2012)
Following is a summary of certain statutory provisions effective through levy year 2011/payable
year 2012 relative to tax levy procedures, tax payment and credit procedures, and the
mechanics of real property valuation. The summary does not purport to be inclusive of all such
provisions or of the specific provisions discussed, and is qualified by reference to the complete
text of applicable statutes, rules and regulations of the State of Minnesota.
Property Valuations (Chapter 273, Minnesota Statutes)
Assessor's Estimated Market Value. Each parcel of real property subject to taxation must, by
statute, be appraised at least once every five years as of January 2 of the year of appraisal.
With certain exceptions, all property is valued at its market value, which is the value the
assessor determines to be the price the property to be fairly worth, and which is referred to as
the "Estimated Market Value."
Taxable Market Value. The Taxable Market Value is the value that property taxes are based
on, after all reductions, limitations, exemptions and deferrals. It is also the value used to
calculate a municipality's legal debt limit.
Indicated Market Value. The Indicated Market Value is determined by dividing the Taxable
Market Value of a given year by the same year's sales ratio determined by the State
Department of Revenue. The Indicated Market Value serves to eliminate disparities between
individual assessors and equalize property values statewide.
Net Tax Capacity. The Net Tax Capacity is the value upon which net taxes are levied, extended
and collected. The Net Tax Capacity is computed by applying the class rate percentages
specific to each type of property classification against the Taxable Market Value. Class rate
percentages vary depending on the type of property as shown on the last page of this Appendix.
The formulas and class rates for converting Taxable Market Value to Net Tax Capacity
represent a basic element of the State's property tax relief system and are subject to annual
revisions by the State Legislature.
A homestead market value exclusion is applied prior to determining a property's net tax
capacity, for property classified as Class 1 a or 1 b and Class 2a. Property taxes are determined
by multiplying the Net Tax Capacity by the tax capacity rate, plus multiplying the referendum
market value by the market value rate.
Property Tax Payments and Delinquencies
(Chapters 275, 276, 277, 279-282 and 549, Minnesota Statutes)
Ad valorem property taxes levied by local governments in Minnesota are extended and collected
by the various counties within the State. Each taxing jurisdiction is required to certify the annual
tax levy to the county auditor within five (5) working days after December 20 of the year
preceding the collection year. A listing of property taxes due is prepared by the county auditor
and turned over to the county treasurer on or before the first business day in March.
The county treasurer is responsible for collecting all property taxes within the county. Real
estate and personal property tax statements are mailed out by March 31. One-half (1/2) of the
taxes on real property is due on or before May 15. The remainder is due on or before
October 15. Real property taxes not paid by their due date are assessed a penalty that,
III-1
depending on the type of property, increases from 2% to 4% on the day after the due date. In
the case of the first installment of real property taxes due May 15, the penalty increases to 4%
or 8% on June 1. Thereafter, an additional 1% penalty shall accrue each month through
October 1 of the collection year for unpaid real property taxes. In the case of the second
installment of real property taxes due October 15, the penalty increases to 6% or 8% on
November 1 and increases again to 8% or 12% on December 1. Personal property taxes
remaining unpaid on May 16 are deemed to be delinquent and a penalty of 8% attaches to the
unpaid tax. However, personal property that is owned by a tax-exempt entity, but is treated as
taxable by virtue of a lease agreement, is subject to the same delinquent property tax penalties
as real property.
On the first business day of January of the year following collection all delinquencies are subject
to an additional 2% penalty, and those delinquencies outstanding as of February 15 are filed for
a tax lien judgment with the district court. By March 20 the county auditor files a publication of
legal action and a mailing of notice of action to delinquent parties. Those property interests not
responding to this notice have judgment entered for the amount of the delinquency and
associated penalties. The amount of the judgment is subject to a variable interest determined
annually by the Department of Revenue, and equal to the adjusted prime rate charged by banks
but in no event is the rate less than 10% or more than 14%.
Property owners subject to a tax lien judgment generally have five years (5) in the case of all
property located outside of cities or in the case of residential homestead, agricultural homestead
and seasonal residential recreational property located within cities or three (3) years with
respect to other types of property to redeem the property. After expiration of the redemption
period, unredeemed properties are declared tax forFeit with title held in trust by the State of
Minnesota for the respective taxing districts. The county auditor, or equivalent thereof, then
sells those properties not claimed for a public purpose at auction. The net proceeds of the sale
are first dedicated to the satisfaction of outstanding special assessments on the parcel, with any
remaining balance in most cases being divided on the following basis: county - 40%; town or
city - 20%; and school district - 40%.
Property Tax Credits (Chapter 273, Minnesota Statutes)
In addition to adjusting the taxable value for various property types, primary elements of
Minnesota's property tax relief system are: property tax levy reduction aids; the renters credit,
which relates property taxes to income and provides relief on a sliding income scale; and
targeted tax relief, which is aimed primarily at easing the effect of significant tax increases. The
circuit breaker credit and targeted credits are reimbursed to the taxpayer upon application by
the taxpayer. Property tax levy reduction aid includes educational aids, local governmental aid,
equalization aid, county program aid and disparity reduction aid.
Debt Limitations
All Minnesota municipalities (counties, cities, towns and school districts) are subject to statutory
"net debY' limitations under the provisions of Minnesota Statutes, Section 475.53. Net debt is
defined as the amount remaining after deducting from gross debt the amount of current
revenues that are applicable within the current fiscal year to the payment of any debt and the
aggregate of the principal of the following:
1. Obligations issued for improvements that are payable wholly or partially from the
proceeds of special assessments levied upon benefited property.
2. Warrants or orders having no definite or fixed maturity.
3. Obligations payable wholly from the income from revenue producing conveniences.
III-2
4. Obligations issued to create or maintain a permanent improvement revolving fund.
5. Obligations issued for the acquisition and betterment of public waterworks systems,
and public lighting, heating or power systems, and any combination thereof, or for any
other public convenience from which revenue is or may be derived.
6. Certain debt service loans and capital loans made to school districts.
7. Certain obligations to repay loans.
8. Obligations specifically excluded under the provisions of law authorizing their
issuance.
9. Certain obligations to pay pension fund liabilities.
10. Debt service funds for the payment of principal and interest on obligations other than
those described above.
11. Obligations issued to pay judgments against the municipality.
Levies for General Obligation Debt
(Sections 475.61 and 475.74, Minnesota Statutes)
Any municipality that issues general obligation debt must, at the time of issuance, certify levies
to the county auditor of the county(ies) within which the municipality is situated. Such levies
shall be in an amount that if collected in full will, together with estimates of other revenues
pledged for payment of the obligations, produce at least five percent in excess of the amount
needed to pay principal and interest when due. Notwithstanding any other limitations upon the
ability of a taxing unit to levy taxes, its ability to levy taxes for a deficiency in prior levies for
payment of general obligation indebtedness is without limitation as to rate or amount.
Metropolitan Revenue Distribution (Chapter 473F, Minnesota Statutes)
"Fiscal Disparities Law"
The Charles R. Weaver Metropolitan Revenue Distribution Act, more commonly known as
"Fiscal Disparities," was first implemented for taxes payable in 1975. Forty percent of the
increase in commercial-industrial (including public utility and railroad) net tax capacity valuation
since 1971 in each assessment district in the Minneapolis/St. Paul seven-county metropolitan
area (Anoka, Carver, Dakota, excluding the City of Northfield, Hennepin, Ramsey, Scott,
excluding the City of New Prague, and Washington Counties) is contributed to an area-wide tax
base. A distribution index, based on the factors of population and real property market value
per capita, is employed in determining what proportion of the net tax capacity value in the area-
wide tax base shall be distributed back to each assessment district.
III-3
STATUTORY FORMULAE: CONVERSION OF TAXABLE MARKET VALUE (TMV) TO
NET TAX CAPACITY FOR MAJOR PROPERTY CLASSIFICATIONS
Local Tax Local Tax Local Tax Local Tax Local Tax
Payable Payable Payable Payable Payable
Propertv Type 2008 2009 2010 2011 2012
Residential Homestead(1a)
Up to$500,000 1.00% 1.00% 1.00% 1.00% 1.00%
Over$500,000 1.25% 1.25°/a 125% 1.25% 1.25%
Residential Non-homestead
Single Unit(4b1)
Up to$500,000 1.00% 1.00% 1.00% 1.00% 1.00%
Over$500,000 125% 1.25% 1.25% 125% 1.25%
1-3 unit and undeveloped land (4b1) 1.25% 1.25% 1.25% 1.25% 1.25%
Market Rate Apartments
Regular(4a) 125% 125% 125% 1.25% 125%
Low-Income(4d) 0.75% 0.75% 0.75% 0.75% 0.75%
Commercial/Industrial/Public Utility(3a)
Up to$150,000 1.50%' 1.50%' 1.50%' 1.50%' 1.50%'
Over$150,000 2.00%' 2.00°/a' 2.00%' 2.00%' 2.00%'
Electric Generation Machinery 2.00% 2.00% 2.00% 2.00% 2.00%
Commercial Seasonal Residential
Homestead Resorts (1c)
Up to$600,0003 0.55% 0.55% 0.50% 0.50% 0.50°/a
$600,000-$2,300,0003 1.00% 1.00% 1.00% 1.00% 1.00%
Over$2,300,0003 125%' 1.25%' 1.25%' 125%' 1.25%'
Seasonal Resorts (4c)
Up to$500,000 1.00%' 1.00%' 1.00%' 1.00°/a' 1.00%'
Over$500,000 125%' 1.25%' 1.25%' 1.25%' 1.25%'
Non-Commercial (4c1)
Up to$500,000 1.00%'2 1.00%�2 1.00%�2 1.00%�2 1.00%�z
Over$500,000 1.25%'2 1.25%�Z 125%'2 1.25%�2 1.25%'Z
Disabled Homestead (1b)
Up to$50,0003 0.45% 0.45°/a 0.45% 0.45% 0.45%
$50,000 to$500,0003 1.00% 1.00% 1.00% 1.00% 1.00%
Over$500,000 1.25% 1.25% 125% 1.25% 125%
Agricultural Land&Buildings
Homestead (2a)
Up to$500,000 1.00% 1.00% 1.00% 1.00% 1.00%
Over$500,000 1.25% 1.25% 1.25% 125°/a 1.25%
Remainder of Farm
Up to$1,140,0004 0.55%2 0.55%Z 0.50°/a2 0.50%2 0.50°/aZ
Over$1,140,0004 1.00%2 1.00°/a2 1.00%2 1.00%2 1.00%2
Non-homestead (2b) 1.00%z 1.00%2 1.00%2 1.00%2 1.00%2
' Subject to the State General Property Tax.
2 Exempt from referendum market value tax.
3 20081egislative increases.
4 2010 legislative increases.
III-4
APPENDIX IV
EXCERPT OF 2010 ANNUAL FINANCIAL STATEMENTS
The City's financial statements are audited annually by an independent certified public
accounting firm in conformance with generally accepted accounting principles. Excerpts of the
City's Comprehensive Annual Financial Report for the fiscal year ending December 31, 2010
are presented here. (The City's Comprehensive Annual Financial Report for fiscal year ending
December 31, 2011 is not yet available.) The reader should be aware that the complete
financial statements may contain additional information which may interpret, explain or modify
the data presented here.
The City has been awarded the Certificate of Achievement for Excellence in Financial Reporting
by the Government Finance Officers Association of the United States and Canada (GFOA) for
its comprehensive annual financial report (CAFR) for the years ended December 31, 1984
through December 31, 2010. The Certificate of Achievement is the highest form of recognition
for excellence in state and local government financial reporting.
In order to be awarded a Certificate of Achievement, a government unit must publish an easily
readable and efficiently organized comprehensive annual financial report, whose contents
conform to program standards. Such CAFR must satisfy both generally accepted accounting
principles and applicable legal requirements. A Certificate of Achievement is valid for a period
of one year only.
A Certificate of Achievement is valid for a period of one year only.
IV-1
I�DV
�������
INDEPENDENT AUDTTOR'S REPORT
Honorable Ma}ror and Membecs
of the City Counoil
City of Shakopce
Shakopce,Miffiosota
We have wditai tLe aceompanying financiai ataumeats of tlu govemmeatal activities,the business-type
activities,each major fund aod the aggregate remainiag fimd inCormation of tho Ciry of Shakopee,
Minneaota,as of and For tho year ended December 31,2010,w6ich colledively comprise the City's
basic 5nencial statements as listed in the Table of Contwts. 'I'6ese fm�cial statea►onte are ihe
resfwnsibility of the City's maoagemeat. Our�esponsibility is W expresss opmions on these finaociai
ctatmnenta besad on o�a andit
We canducted our sudit in accoidaace with U.S.geaerally eccepted auditmg etnnderds and the st�dacds
appGcsble to 5neocial audits contained in Gavernme►+t ALditing Standards,issuod by the Compu�oUer
Gencral of the Unitod States. Those stand�da ctquire Wat wo pleo and perfvim the audit w obtain
reasonable 9•�,*+�ce about whether the financial statements�froe of material ausstatemmt An audit
includea ezamining,on a test besis,evidence wpporting U►e amounts azd diactosures in the fin�cial
statements. An audit aleo i�ludes aseasing the sccownin6 PT�iPies used and signiScant estimatea
made bY management,as well u evaluating tLe ovetall Enancial statemant prex,ntetion. We believe oiu
audit provides a reasoneble buis for oia opiniooa
In our opinion,t6e financial statemerts refectod W above proaeut fffidy,in ell material r�ts,the
respceave 5nancial poeidon o[r!ro gavcmmencat ecavi6a,the busu►oss-cype activities,oach major fund
and the aggregate iemaining Cuad information of t6e City of SGakopee,Minneaota,aa of December 31,
2010,aad the respective chaugoe in Snmicial position aod where applicable,cash flows,thaeof,aud tha
respcetive budgewy wmpsriwn for the Geaeral Fund Cor the ye�then ended in conformity with U.3.
B�n�Y�Pted accaunting principles.
The Ciry has impiementod Govanmental Accounting Stemdazds Boerd(GASB)Sfatement No.54,Fursd
Balance Reporting and Gm+ernmaUal Fund Type Definitions for the y�ar ended Doc�ber 31,2010.
In a�;coniec�cc with GovenuneN ALdilirrg Strmd�vdr,we 6eve alyo is.wiod our report dated Jutie 7,2011,
oa our coasideratioa of the City's irtemal control over 5nmcial ispoiting and oa ouc te.sts of its
compliance with cetfain provisions of laws,regulations,crontr�acts and gtant agtamentr and othu
matters. 1he ptupose of t6at report is to describe the scope of our testing of intemal control over
financia!c+eporting and compliar►ce and the results of that testing mid not w provide m opinion on the
intemal control over 5nancial reporting or on compliance. TLat repoA is an integnl part of en eudit
perfoanad in accordance with Governmeiu Audrtinig Standards and should be congidecnd in esscssing the
results of o�a audit
U.S.geaerally accepted acco►mting prineiptes require thaz ihe Managemen£s Discuasion end Analysis,
which follows dtis isport letter,end the Analysis and Schedule of Funding Ptog[e�s—Other Post
Employment Benefita,�listed in the Teble of ContenU,w be presmted to suppkment the besic
5nancisl statements. Such infonnation,although not a paR of the basic 5nencisl statements,is reqaired
by the Govemmcntal Accounting Stmderds Bosrd(GASB),who considers it w be�esseotial part of
finencial cepoeting fa plecing the basic Snaacial statemrnts in an appmp�iate opecational,eco�nic or
histoncal context. We have applied certain liautcd procedures to the mqw�sd snPPk��S'
informa6on in accondaoce with U.S.6�Y���8 staodacds,which ccrosistefl of inquiries
of management about the methods of preparing the inforroation and compsring the info�mation for
consistency with managemenYs tesponses w our ioqiriries,thc basic financial stauments and ot6er
lmowlodgo we obtauied during our sudit of the basic�iel satements. We do rot expness an opinion
or provide erry assucance on the info�ioa boca�e the limited p�ocedurcc do not provide us wiffi
sufficieat evidence to express an opinion or provide any awmnce.
Out sudit wa9 conducted for the ptupox of forming opinions on the financial statements tLat
colloctiveJy comprise the City's finmcial statements es a whola The sccompanying supplementazy
info�mation identifiai in t6e Table of ContenU is presented for purposes of additiooal analysis end is not
a�eqiwed pazt oCtt�e financiel stauments. 'Ihe supplementary info�ation is the respoavibiliry of
maoagement and was derived from and relate dircctly to,the imderlying accounting and other records
used w prepare ihe financial statements. Tlie infotmation has been subjected to the auditing procedtiu�es
epplied in the audit of the financiel stattmenu and certain edditional piocedures,includiag compering
and reconciling such infamation dirxdy to the underlying acc.amring az�d other rocords usod to prepaco
the finencial stetemeras or w the 6neucial statements themselves,and other procediues in aacordance
with U.S.gene�altY accepted auditing standerds. [n our opinion,tho information is fairly stated,in all
maucial respocts in telation W the financiat statements as a wholc.
The infotmation identificd in the Table of Coatents as the Introductory aad Statistical Sections ere
pcesented for putpous of edditional mnlysis and are not e roquired pert of the basic financial statementa.
This iafofmation has mt baa subjected to tlx sudit procedures applied in the sudit of the basic financial
statemenis and,accocdingly,we expresv no opinioo on it
l�, ,�W�,.l�, V.�, l�P-
KERN,DEWHNTER,VIERE,LTD.
Bloomington,Minneaota
Jtme 7,2011
�V-2
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CITY OF SHAICOPEE
STAiEMENT OF ACI7V[TIES
For the Yar�aded December 31,2010
Net(ExPen.+e)Rcvonu�s
Prog�am Rcvenues and Chenges in NG Ass�ts
ppaating Capital Grants
Chsrges for ('m�nts and and GovarommW Business-Type
Fynctionslprogtam5 Lxpatses Savixs Coniribufloos Conhibutions Activicies Activitics T'otal
Govern�mtal Adivitk�
Genera!Govea�t S 3,042,918 S 632,686 S 42,228 S 9,500 S (2,33&SO4) S - S (2,338,504)
Pubiie Safety 9,123,316 1,716,373 372,188 • (7,034,SS5) - (7,034,553)
Public Worb 8,391,874 941,224 2,529,44[ 302,050 (4,A23.159j • (4,425,13�
Ecocwmic Devdop►nent 427,t69 • - • (427,169) • (427,169)
Cultu�e and Reaeation 3.765,660 1,039.820 - 440.900 (2,2E4.940) (2,284.940)
Interest on La►g-Tecm Debt 784,824 - - - (784,824) - (784,824)
Tota1 Govanmental Adivities 25,541,761 4,350�03 2,943,857 952,d50 (17,295,t51) - (17,29i,151)
BminefrType Activttla
Elcdric 32,700,410 36,872,008 - 137,211 • 4,308,809 4,308,809
We�teer 3,293,079 4,417,49a - 1,078,590 - 2,2a3,009 2,203,009
Sewa 3,683,417 3,508,947 6,4i5 43,600 - (L24,dS5) {124,45�
� Storm Dsaa�age 1,792,749 1,281,986 - 399,600 • (1[1,163) (111,163)
� Total Busine�s-Typc Activities , 41,471,655 46,080,439 6,415 1,661,001 - 6,276,200 6,276,200
ToW Gavanmental�d
Busiacsa-'IypeAcriviriea S 67,013.41b S i0,d30,742 $ 2.450,272 S 2,613.45! (I7.293,iS1} 6,276,200 (1t,018,931)
� �� s�� s�
Gaieral Rsvensa
Property Taxes 14,229,I L 1 - 14,229.1 t l
Z-�(�y��� 147,561 147,561
Unrestricied Inves�ent F.an►ings 1,039,867 1,279,872 2,319.739
Tnosters 2,089,406 (2,089,d06)
ToW(3a►aal Rcvenues snd Transfers 17,305,945 (809,534) 16,6%,4l t
C6aa�e ia Net Maen 210,794 5,466,666 3,677,460
NetAneb-Be`inoint 157;d48,589 173,501,422 330,950,011
Nd A�ub-E�dia= S IS�7,639�,_383� S 17�8.�,08�8 S 336,627,471
The Nous to the Fiouncial Stau�cnu are an integral part of this statement
CITY OF SHAKOPEE
BALANCE SHEET-GOVERNMENTAL FUNDS
December 31,20y0
Debt Servicc
2004A Other Total
Improvement Govemmental Govemmental
General Fund Bonds Funds Funds
ASSETS
Cash and Investments S 8,846,962 S 474,642 $ 17,518,177 S 26,839,781
Taxes Receivable-Delinquent 305,598 - 5,026 310,624
Spxial Assessments Receivable:
Dclinquent 4,684 - 26,1U5 30,789
Deferred 50,464 2,169,496 3,805,145 6,025,105
Accounts Receivable 565,331 - 721�032 1,286,363
Iriter+est Receivable 46,631 1,775 68,787 117�193
Due from Other Funds 234,632 - - 234,632
Notes Receivabte - - 82,241 82,241
Prcpaid Itcros 149,940 - - 149,940
Tatal Assets S 10,204,242 � 2,645,9t 3 S 22,226,513 S 35,076,668
LIABILITIE5 AND FUFID
BALANCES
Lisibilities
Accowits Payabte S 3Z5,762 S - � 367,583 $ 693,345
Due to Other Funds - - 75,000 75,00(J
Due w Other Governments - - 367,351 367,351
Salaries and Benefits Payable 480,004 - - 4g0,p04
Deferred Revenue 360,746 2,l b9,496 3,836,276 6,366,518
Total Liabilities 1�166,512 2,169,4% 4,646,210 7,982,218
Fund Bnlance
No�pendable 149,940 - - 149,940
Resti'icted 218,032 476,417 8,897,262 9,591,711
Committed 345,820 - 8,799,844 9,145,664
Unassigned 8,323,938 - (116,843) 8,2U7,135
Totat Fund Balances 9,037,730 476,417 17,580,303 27,094,450
Total Liabilities and Fund
Balances S 10,204,242 S 2,645,913 $ 22,226,513 S 35,076,668
T'he Notes to the Financia! Statoments are an integral part of this statement.
IV-5
CI'CY OF SHAKOPEE
RECONCIIrIATION OF THE BALANCE SHEET TO
THE STATEMENT OF NET ASSETS-GOVERNMENTAL FUNDS
December 31,2010
`Ti otal Fund Balances-Governmental Funds � 27,094,450
Amounts reported for govemmental activities in the Statement of Net Assets
are different because:
Capital assets used in govemmental activities are not cun�ent financial
resources and,therefore,are not reparted as assets in governmental funds.
Cost of Capital Assets 148,906,849
Less Accumulated Depreciation (53,017,680)
Long-term liabilities, including bonds paya.ble,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 (18,710,004}
Net OPEB Obligation (550,498)
Delinquent properiy taxes and assessments receivable will be collected this
year,but are not available soon enough to pay for the ciurent period's
expenditures and,therefore,are deferred in the funds.
Property Taxes 310,624
Special Assessrnents 30,789
Deferred special assessments receivable are not available to pay for current
expenditures and,therefore,are deferred in the funds.
Deferted Special Assessments 6,Q2S,1 QS
Governmental funds do not report a liability for accrued interest
due and payable. (289,4t 1)
Intemal service funds are used by management to charge the costs of
equipment,buildings,park assets and emptoyee benefits to individual funds.
A portion of the assets and liabilities of those funds are included in
govcrnmental activities in the Statement of Net Assets. 47,859,155
Total Net Assets-Governmental Activities � 157,b59,383
The Notes to the Financial Staiements are an integral part of this statement.
I V-6
CI'TY OF SflAKOPEE
SfATEMENT OF REVENUES,EXPENDlTURES AND
CHANGES IN FUND BALANCFS-Gf3VERNMENTAL FUNDS
For the Year Ended December 31,2010
Debt Service
2004A Other Total
Improvemerit Govemmemal Govemmenta]
Cieneral Fund Bonds Funds Funds
REYENUES
Property Taxes S 13�557�00? S - S 681,220 � 14,238,227
Tax Increments - - 147,561 147,561
Spccial Assessmtnts 28,988 231,967 1,143,133 I,404,088
Licenses and Petmits l,303,9d4 - 34,207 1,338,111
Intergovemmental 828,906 - 2,095,255 2,924,161
Charges for Services 1,827,039 - 375,485 2,202,524
Fines and Forfeitwes 423,746 - 125,797 549,543
Miscellaneous 446,889 3,939 804,210 1,255,038
Totai Revenues 18,416,479 235,906 5,406,868 24,059,253
EXPENDTTURES
Corrent
General Government 2,960,233 - - 2,960�233
Public Safety 8,953,176 - 59,391 9,O12,567
Public Works 2,632,923 - 1,2b9�699 3,902,6Z2
Culture and Recreation 4,075,919 - • 4,075,919
Economic Development 70,019 • 204,896 270,915
Debt Service
Principal - 420.000 3,380�000 3,80Q.OU0
Interest and Other Charges - 91,550 741,695 833,245
CapitAlOuNay 32,565 - 2,779,923 2,812,488
Total Expenditures 18,724=835 511,550 8,431,b04 27,b67,989
Excess of Revenues
Under Expenditures (308,356) (275,644) (3.024,'736) (3,608,736)
OTHER FJNANCING SUURCES
Ns��
Proceeds&om Salt of Capital Assot 6,000 - - 6,000
Bonds Issued - • 1.555,000 1,555,000
Transfecs In 2,233,806 - 10,966,001 13,199,807
Transfers Out �4.396,OOU� - (7,984,403Z (12,380,403)
Total Other Financing Sources
(Uses) (2,156,194) 4,536,598 2,380,404
Net Changt in Fund Balances (2,464,550) (275,644) 1,511,862 (1,2Z8,332}
FUND BALANCES
BeginaiagofYa�r 11,502,280 752,061 16,068,44t 28,322,782
Ead of Year $ 9,037,730 S 476.417 S 17,580,303 S 27,094,450
The Notes to the Financiat Statemenu are an integral part of this statement.
IV-7
CiTY OF SHAKOPEE
RF.CONCILIATION UF TH�STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES TO
TI�E STATEMENT OF ACTI'VITIES-GOVERNMENTAL FUNDS
For t6e Ycar F.nded December 31,2010
Net Change in Fund Balancas-Governmental F�nds � (1,228,332)
Amounts reported for governmental activities in the Statemeat of Activities are
different bxause:
Capitxl outleys arc reported in governmenta!funds es expenditures. However,in the
Statement of Activities,the cost of those assets is allocated over the estimated useful
lives as depreciation expense.
Capital Outlays 2,291,036
Deprociation Expense (4,320,960)
Loss on Disposal of Fixed Asscts (140,817}
Contributed Assets 480,000
Principal payment�on long-term debt are recognized as expenditures in the
governmental funds but as an increase in the net assets in the Statement of Activiti�s. 3,800,000
Interest on long-oerm debt in the Statement of Activities differs from the amount
reportod 'm the governmental funds be�ause interes#is tecognized as an expenditure
in the funds when it is due and tfius requ'ves use of cwnnt financial resources.
In the Statement of Activities,however,interest expense is recognized as
the interest accrues,regardless of when it is due. 48,421
Proceeds from iong-tecm debt are recogniud as an other fmancing source in the
govornmental funds but as a decrease in nat assets in the Statement of Activities.
Bonds Payable (1,555,000)
Certain revenues in the Statemeot of Activities that do not provede current fmancial
resources are not reported es revenues in the funds.
Special Ass�ssments {1,283,904)
OPEB obligations ere recognized when paid in the govemme�rt funds but recognized
when incurred in the Stetement ofActivities (129,614)
Delinqueni and defened receivables wilt be collected this year, bui are not
availabk soon enough to pay for the cnrrcnt period's expenditures and,thecefore,
are not revenues in the funds. (9,t l 6)
Internal�rvice funds are used by management to charge the costs of certain
activities such as buildings,equipmcnt,psrk assets and amployee bene6ts to
individual funds. (See Note 2.B.) 2,259,080
Change in Net Assets-Governmental Activities � 210,794
The Notes to the Financial Statements are an integrat part of this statemen�
IV-8
CITY OF SHAKO.PEE
STATEMEIV'P OF REVENUES,EXPENDTTURES AND
CHANGES IN FUND BALANCES-
BUDGET AND ACTUAL-GENERAL I�'UND
For fhe Year Eaded December 31,2010
Budgeted Amounts Variance with
- Actual Fiaal Budget-
Origina! Final Amounts Over ([7ader�
RE'VEI�'IJES
• Property Taxes $ 13,481,010 �13�481,010 S 13,557,007 S 75,997
Special Asses�nents 2,000 2,000 28,988 26,988
Licenses md Pexmits 1,028,800 1,028,800 1,303,904 275,104
Intergovemmenta! 608,260 608,Z60 828,906 220,Cr46
Charges frn'Services 1,880,040 1,880,b40 1,827,039 {53,001)
Fiaes and Forfciture,s 381,000 381,000 423,746 42,746
Miscellaaoous Revennes:
Iavestme.nt Income 375.000 375,000 314,043 (60,95�
Coninbutions and Donations 5�000 5,000 2,322 (2,678)
Otha 44,950 44,950 130,524 85,574
Total Revenues 17,806,050 17,806,060 18,416,479 610,419
EXPE��TDITURES
CDlTEDt
Ceaeral Govemtnent 3,229,250 3,164,250 2,960,233 (204,O1�
Poblic Safcty 9,284,200 9,262,017 8,953,176 (308,841)
Pablic Works 2,707,590 Z,714,090 2.632,923 (81,167)
P�1c and Recreation 4,3TT,240 4,413.880 4,075,919 (33'7,961)
Economic Development ISS,000 142,000 70,019 (71.981)
C�pital Outiay
Oeneial Govemment 8,000 73,000 10,382 (62,618)
Pablic Safety - 22,183 22,183 -
Pabiic WoR1cs 6,500 - - _
Total Expenditvres 19,767,780 19,791,420 18,724,835 (1,066,585}
P�ccess of Reveaues Over
(Under)Expeaditnt+�s (1,961,120) (I,985,360) (308,356) 1,677,004
OTHER FINANCINC SOURCES(U3�j
Proceeds from Sale of Capital Asset - - 6,000 6,000
'['ranafers In 2,044,400 2,044,400 2,233,806 189,406
'I'ranafers put - (2,796,000) (4,396,000) (1,6Q0,800)
� Total Othcr Finaaciag Sources
(Uses) 2,044,400 (751,500) (2,156,194) (1,4�4,594)
' Net Change in Fund Balances S 82.680 S (2,736,960) (2,4fi4,550) S 272,410
���
FUND BALA.'�iCES
Beglnaing o[Year 11,502,280
End otYeu S 9,037,730
�.��
The Notes to the Finaacial5tattmenta art an iategtat part of this statemeat.
IV-9
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C!1'Y O!SHAKOiEB
37'A7EMENT OF CASN►1.OW5-lRO�'AIBTARY FUIYDS
For rie Yssr Eeded Dcaober 31,2�10
Bua�eu-Type Activitle�-EMierpriee Ftsid�
Govemma�ml
Activitiee-
Swtm ]nternal
Ebatric Wsou Se�er Dn„uge ToW Servia Fund�
CASH F[AVVB-OlERAT[NG ACl'IY17IL4
Receipu 6om C�nromas aod U� S 36,427,681 5 4r1A5,827 S 3,d04,8i2 S 1,22&� S l3,507�40 S 7,124,433
PsY��W�DDliocs {26942,427) (8�1�11'� f1.�.510) i733.�34) (31,083,� (3.68'n
PayoKau to Fmployen (3.216,141) (1.3i4,37� (235,814) (334,780� (3.164,91 q (703,Z'l0)
paymmb(prlalet(had$avioa - - (SI,S73) (17,191) (68.764) -
paymeat 5vm pperRnq('xa�y� - 6,415 6.413
Nd Cash F1oat-Ope�ting
Aetivitia 6,269,3I3 2,247,134 5�8,370 113.333 9,198.172 Z.417,47E
CASB FLOWS-NONCAlYTAL
FIIVANCING ACi'IVl'i'�S
Proceed�from S�k of Mxtt 24,133 2,676 • - 26,809 �
Trwic fmm Other Fund� - - , . . 2,736.299
Trmefa ro Otber Fvod� (973,1'74) (816,330) (50,0001 (50.00d) (I,E9i.524) (1,466,Z9'n
Net Cab Plow�-?�onc�tal
Fi�umein=Artivitie� (9SI,O+tt) B13.b7� (SO�y0001 (30.000) (1,86�,'11� 1X/0.002
c�+se r�.ows-c,►rrru.�►xo u�TSn
�nivcn�c wcnvn�s
rrioc;n•�rdeono�ta c�l,000� c�oa.00at • • (76s.000� -
Lttesat Paid oa Debt (868�932) (70.474) - - 1939.42� •
Cowiection Clue�a • 1.065,296 • - 1,065,296 •
T��p� . - 33.738 94.737 128,495 -
��I g������ - - �IS.518 - 43.318 -
Lx�xftmdLoenforC�pialAequuition • - I.SOS�000 - 1.505�000 .
Proceads fi+nm Di�posd of C�pitel Aueo� • - - 83.376 83,376 228,527
,��;,�d�orc.p�wn�,. a.,a�,��i c;�o.sas� c�sz,o�a� na�,um ta,zo9,�sa� a.�3.aze�
Nat Cuh Fbwn•Capitd�nd
Relatod Financia�Atxivitia (3,997.5931 <20.234 1.102.236 (611=116) fl,086,239) (1,16�,9011
CASB FLOWS-IIrVEBT[NG ACflVti7E3
Procead�(Pwehares)of Inva4neota (5,111,203) 814,�t0 13,M0,736 14,853,8W 23.397.647 {3,334,11�
Piymart Received fm Nota Reoeivabk . - . . - 80.0Q0
IntapR md Divideads R,eoeivM 321.219 88.?32 448,907 490,974 1.399,332 393,%9
lYat Guh Fb�n-hmata�8
Activma (4.789.9841 90Z.542 13,339,643 13,3M,'n8 24,996,979 (Z,860.1{�
Iiat GLn{e Ir CuY nd Ca�h i�dnknb (3,469,301) 2,756,136 15.130,249 14.5Z7p17 29,?A4.197 (337,569)
C+�SR AND CASH BQU[VALL.'YTS
��y�{Yyr 12,245.195 2.598,691 1,161.481 1,345.743 17,371,110 2,D7S,337
Ead�t yqr S 6,775.390 � 5.354.927 S 16.3 t 1.730 f 16.tn.760 �S 46.615.307 S 1.737.788
�� � ��� �� ���
3tECOKC1UA770N OF CASH ANiD CA3A
EQLTIVALENP$TO 7'H6 5IA'['EIVISI�J'OR
IYET ABSB?8
Reetrit1ed Aocamu S 2,03E,T12 S 4,367,993 S - S - S 6,406.765 S -
Other A000ueta IOD.000 _ . . 100�000 -
Ca�h and Inva�aw ?A,981,i 18 3�108.384 16,311,730 L6,172,760 36,893,992 14.4I 1,695
Subootal 27,119,890 7,776,377 16,311,730 16,1T2,760 63,380,757 14,411,695
IenL.oejTamLrvaanenh (14,34�.000) {2,421,�30) (16�765.430) i12,673,90'n
Cuh wt Ce�h Equivaknts � B.�890 f 5.�35�� S 16.311.� S 1�760 f 16.615307 f 1.737.788
'It�e Nolea W the Finr�oial Stateme�q ace�o intepal put of thu mtanm�
IV-12
CI'fY OF SAAKO�EC
STA'I'E�NT OF CASK FLOiYB-�ROPAI$TARY FUNDS
!�r tre Year eided petepber 31,2010
(���
Binin�xt-'I'flae Mtivitie-FalaD►��e Fnnd�
Go�dt�mrnW
Acovkias-
Swrm ���
Eketric Wa�er Sewer Drsin�e Tohl Savke fitodt
RECONCILIATi0I1 OF O�P.RATING
WCOME(LUBS)TO FET CA9H FLUWS-
OPERAi'AYG ACRVTI7ES
�P�i�(�) S 4,890.161 S 1,081,449 S (422,194) f (600.066) S 5,149,350 S 1.022,l92
Adlu�tn+mW to Raeonoils Op�ntin�inoome
(1.aa�)w Nec C+rh Flow�•
ooarains Activida:
Mimlrneoa�Opaatit�Revanue 22d�990 IZ1.924 6,4t3 � 357�29 -
Fme Ebatric 3ervice to dx Ciry (197�882y - - • (191.E8Z1 -
D�atiai�+id A+�rortation Expen�e 1.568,502 1.094,557 72�,373 671a71 1,062.005 1,709,620
Cha�pe in Aweu md l.f�bilities:
Aaea�nh Reoeinbk,Net (43H,046) 7.337 (i6,122) 41,451 (445,360) (90p)
Due frmo Otber Fund� 110,290 72 - - 110.362 -
Pre�id kan (826) (2731 - • (1.101) -
6rn°1o�' '�9.907 (8.7Q8) - - 41�199 .
A000mM+Pay�bb (3&761) t57,099) 68,174 16,12E 8,442 -
CtetomerDepo�ib 71,2J6 (i00) - • 7p,7� -
De&eed Rmnuc ?,Z34 23.663 - . n,g9� .
C�uOOmerAdw�ocs E,O�I (4.Z63) • • 3.776 -
Due m Olher Punds 69,273 21,423 4,309 1,�J6 96,M5 -
CaaiPda�edA6�ence+PaYable • - 6.510 3,372 9,E42 107.430
Na OPfi6 Oblii+aoo • - 6,703 6,703 13,406 (43o,a84)
O�herL'nMlities S13`808� (34.46d1 (10EX1�
Toqi Adjuuaienp 1,379.152 I.165,685 760,364 743.421 4.048,822 1.393,286
Tlet Geh Floa�-
OpmatinQ Aativitia � 6.Z69J 13 _S 2.247.134� 3� S�E.� f�� � 9.�171 S 2�7.17E�
NONCASfI lHVES'iIlYG,CAT17'AL AIVD
F[NANCING ACiTV17IIS
Coetribution�ofCapital Aaiels from thc
M�D�m'�d Dwebper� S 137.211 S 13,29� S 4l,600 S 399,60D S 393,705 S 9,500
Padu�a of Capitd Aue1�m A000�mt • - - - • 13.741
Fcee Ekcvie Sariee to the Citr 197,882 - . . 197,882 -
The Nota to tlu Ein�l Staoernenu ae�'urte�al peR of t6s rietanaM.
IV-13
CITY OF SAAKOPEE
STATEMENT OF FIDUCIARY NET A5SETS
December 31, 201)9
Escrow
Agency Fund
.ASSETS
Cash and Investments $ 1,749,597
LIABILITiES
Accounts Payable $ 404
Deposits Payabie 1,748,693
Total Liabilities $ 1,749,597
Tha Notes to the Financial Statements are an integral pari of this statement.
IV-14
CITY OF SHAKOPEE CITY OF 9HAKOPEE
NOTES TO THE FINANCIAL 3TATEMENTS NOTES TO'TAE FIIYAIYCIAL STATEMENTS
Decsmber 31,2010 Deccmber 31,2010
NOTE 1—SUNIIHARY OF SIGIYIIRCANT ACCOUNTING POLICIES NOTE 1—SUMMARY OF SIG1vIF1CANT ACCOUNTiNG POLICIES
A. ReportlnQ Eoqty A. Repordee Eotlty(CoaHaned)
'l�e City of 3hakopa ie a statutory city govemed by an elected mxyor and fovc cotmcil membeca. The Z. Jotnt Veatam sed JoteHy Governed Or`aniz�tion�
eccompanying financiat etatemenu preea►t the govemment entidee tor wtuch the goveromont is
considaed to be 6nanciatly accountabla Loul Government Isformatlon 5yatem�
The financial statement�present the City and ita component units. T6e City includes all funds, Local Govemment Infomiatioa Systems(LOG1S)ia a joint venture of a�proximately 44
organizatione,institutiona,agenciee,depertmwte aod ofTices that se not legally seperate from such, govemmental eotities that providee computuized deta processing and aupport acrvicea w ite
Componeat unite are legaily saparate organiutioav for which the elxted officials of the City azc members. Legally separate,the City doas not appoint a voting majarity of the Board and LOGIS is
Snanciaily eccouatable and are includod within the financid etat�m�ts of the City becaux of the tiacally independent of the City. Diaing 2010,the City paid S 129,104 to LOGIS for savicea
agnificance of their aperational or fineacial ielationehipa witl►We City. providod which ia included ia expenditvrea of the Genecal Fund. Financial statemertts ffie available
The City ia conaiderod financially accouatable for a component imit iCit eppoints a voting majority of by coatacting LOQIS,5750 Dulud►Street,Golden Valley,Minneaote 55422-4036.
the orgmrization's govaning body end it ie able to impose ita will on ffie organization by aigai&candy Scott Jolnt Prosec�tlon A�aocladoe
influencing the progrmu,projxte,activida or level of services perfotmed or psovidod by the
organization or there is a potarcial for ffie orgaziization to provide apeciSc fineacial beneSte to or impose Scott Joint Prosecution Aseociation(SJPA)is a joint venture of approximately eeven cities t1�at
spxific fwanciel bUrdene on,the City. provides legel pmsecutioa and aupport savicea to its membere. Legalty separate,tho City doca not
� appoint a voting majority of the Board of D'uxtoTS sud the SJPA is fiscally independent of the Ciry.
� As a result of applying the componmt uait deSnition criteria sbove,cectain orgaoizationa have been During 2010,the City paid S 443,039 to the S7PA for aervices provided which ia included in
defined and ere praamted in thia nport ae followa: expenditures of the General Fund. Fimocial statements ere availablo by contacting the SIPA,200
Blended Component Unit—Reported as if they wae paR of the City. Foucth Avenue Wcst,Shatcopee,Minnesota 55379.
Joint Ventures and Jointl Govemed Or 3. Other Orgasizadoa�
Y ganiutione—T6e�elatiooehip of the City with the entity ia
disclosed. Sh�lcopa Volunteer F1re Depsrtment Rellef As�oeiatlan
For each of the categories above,the apxific enti6ee are identified ae followa: The Shakopee Vol�mtar Fire Department Rdief Aseociation(the"Aeeociation'�is or�n;zed as a
nonprofit or�ization,legally seperata from the City,by i�a m�beca to provide penaiona end otha
l. Blended Component Untt benefib to auch membas ia accocdnnce with Minnesom Sranetes. It ia not a component unit of the City
The Shako Ecanomic Devc b�8�s�ths Board of Direcwrs is appointed by the memberahip of the Association and not by the City
pee lopment Authority(EnA)was orgmized to promote devclopment, Coimcil. The finencial oversight of tho City is limited to�proval authority for amending the
atiptove housing and reduee blighted areaa in the C�ty. It is includad by reason of the City Council Assaeiation bylaws whai the chaage cesult�in an inecease in the prnsion benefit level roquirin �
having final approval for Shakopx EDA actiooe and the Shekopoe EDA Board being comprised increased City contnbution. The Association Las the authority w levy ita own taxes for paiaiongs and
entirely of City Council Membera. City statThandlw Shakopee EDA sctivity including Shakopee deficils and would continue to exist for its membas if the City wee diesolved. Because the Aseociatioa
EDA funds and the City appmves 5hakopee EDA tex leviea and bonding activity. Therefore,the is fiscally independent of the City,the financial atatemeata of the Asaociation have not bcen included
City has 6naacial oversight for Shaknpee EDA activiHes. within the City's reporting entity.
The activity of the S6aropae EDA ia shown in the ShakoQce EDA Specisl Revenue Fand in the
City's financial stetementa. No xparate finaaciel etatemmts for the Shakopa EDA are isaued. For
any informaUon desirod beyamd whai is presented in thie report,wntact the Finance Diroctor for the
City of 5hakopee at 129 Holmes Street South,Shskopee,Mianeaota 55379-1351.
CITY OF SeAKOPEE Cl'TY OF SHAKOPEE
NOT[LS TO THE FINANCIAL STATEMENTS NO'I'F.S TO THE FINANCIAL 5TATEMEIVTS
December 31,2010 Daember 3],ZOlO
NOTE 1—SUMMARY OF SIGNIFICANT ACCOUN77NG POLICIES NOTE 1—3UMMARY OF SIGPIIFICA►NT ACCOUNTING POLICIES
B. Goverament-Wide aad Fund Financial Stahmend C. Meuurement Foeus,B�It otActooadn�and Finandal Shtemeet Prasnhtloa(Condnued)
The governmcnt-wide financial staternents(i.e.,thc Statement of Net Asaets and the Statemcvt of ����►al tLnd 5nmeial statements are roported ueiag the cunent financial raources masurement
Activtties)report infom�adon on all of the noufiduciary activiHes of the City. The fiduciery fuads ere focus and the modified accrual baeis of accounting. Revenuw are recognized aa eoon es they are both
only rcported in the Statanent of Fiduciary Net Assets at the fund Suancial stetemrnt]evcl. measurabie and availabie. Revanuee are wnaide�d to be availsble whm they arc collectible within the
Governmental ectividee,which normelly sre supported by taxes and intergavemmental revenues,are cunent period or soon enough theroafta to pay liabi(itiea of the curtent period. For this piupose,lhe
reperrted separat�oly from busineas-type acdvities,which rel y to a aignifieant extent on fas and charges City conatders tevenuoa to be available if they ere collated within 60 days of ffie ond of the current
fiacai period. Expendit�aes generally ue rxorded a+hen a liabiliry ia incucrcd,as under accrual
for support. eccounting. However,debt aervice e�cpenditurea,ea well as expeoditurea related W compenseted
T'he Statemeot of Activities demonetrates the deg�se to which the dira;t expen.tes of a given function or e1�6eneeB aad clsima end judgmeats,ue recotded only when paymeat ia due.
segmmt is offsd by program revenuea. Dirax ezpevses are those thet arz clearly idrntifiable with a proP�,�a��y��p����ffid interest associatod with the cutrent fiscal period am all
specific function or segment. Intcrest oo general lon�-term debt is considered an indirect acpense and wnaidered W be suaceptible to accrual md eo have been recogoized a revcnnea of the currsnt 6sca1
is teported separetely in the Statement of Activities. Prog�n revenues include 1)charges to customcrs p��, p�y�e portion of apxial asaesanents receiveble due witLin the cunent fiseal period is
or applicants who purchave,use or direcdy beoefit from goods,swvices or privileges provided by a con8ideted to be sueceptible to accrual es revenue of the cument period. All olt►er revenue iteats are
given funetion or segment and 2)gtauts and contributions that are rostricted to mating the operadonal �opsidaed W be measurable and available anly whm cwh ia received by the City.
or capital requirements of a particular function or seSttent. Taxes end otha items not propaly
� included among program rrvenues are repo�ted instead as goncral revwues. intemally dedicated DeecHptloo of I�nds:
� rcvenues are reporied as general revenues rather than program revenues.
�
� M�jor Gover�ental Fw�da:
Sepazaa finaacial statemeata arc providad for govemmental funds and proprietary funds. Majoz
individual govemmental funds and major individual ente�prise funds aze�spotted as uparate columns in Genetal F�md—This Fund is t6e City's primary oparatlng fund. It accounts for all financial resources
the fund financial statemcnts. of the gmeral City,eucept those roquired to be accounted for io another fund.
7'he Escrow Agency Fund is presental in the fiduciary fund financial etatements. Sincq by definition, 2pp4A Impc�ovement Bonds Dtbt Service Fund—This Fund acco�mte for resourcea accvmulated and
these assets are being held for the bme5t of a thirtl party(othar tocal govanments,private pazties,ctc.) paymcnh made for principal and inte�sst on this bond issue.
and cannot be used to address acdvities or obligatious of the City,this Fund is not incoeporated inw the
govemmrnt-wide statements. p��,F��:
C. Meaearement Focna,Bsais of Aceoaating and FlaancW Statemeat Preeentatlon Electric Fund—Thia Fund accourw for the operations of the City's electric utility.
T6e govantne�-wide financial statements aze reported using ihe oconomic reaouc�es messurement focus Wata Fund—T6is Fond accowrts for 16e opetationa oCthe City's water utility.
aad the accaual basis of acaounting,as aze the proprietary fund financial statemenu. Revcroues are
recarded whea eamed and expenses are teco[dad when a liebility is incumed,rega�dless of the timing of $ewer Fund—This Fund sccoimts for operatioa�of the City's sewa utitity.
related cash flows. Pmperty taxes are rxognized as revenues in the yesr for which they are ieviod.
Granu and similar items are rxognized as revenue aa aoon as eU eligibility rcquirea►ents imposed by the Storm Drainage Fund—Thia Fund aceou�rte for the activities of the City's atorm drainage udlity.
provida have beea md.
Intunal Service Funds:
The Agency Fund�sports only assets and liabilitias and has no measuremmt focus,but does wse the
accrual besis of accoundng ro rocog�nize nceivables and payablea. Equipment Fund—Thia Ftiutd accouots for the City's acquisition of l�ger pieces of equipmeat.
Building Fund—This Fund eccounts for the City's fUnda accumulated for conewetion,improvement
or majar repaira of majrn public buildings.
CITY QF 6HAKOPEE CITY OF SHAKOPEE
NOTES TO THE FINAIYCIAL STATEMENTS NOTE9 TO THE FINANCIAL 3TATEMENTS
Dcesmber 31,2010 Ihoember 31,2010
NOTE 1—5UMMARY OF SIGNIFICAIVT ACCOUNTING POLICIES NOTE 1—SUMMARY OF SIGNLFICANT ACCOUNTING?OLICIES
C. Measanment Foca�,Ba�b of Aewantlng and Finaneial Statemeot Praentadon(Contlnae� C. Me�soremeot Fceus,Bar�of Aceoaadng�nd Fisancial Statement Preseohdon(Contivaed)
Deacrlption of F�andt: (Contlnue� When both nstricted and unreatricted roeo�ee m availablc for oae,it is the City's policy to use
testricted reeaaaea firet,ihen wasetricted reso�uree as thay az+e neoded.
Intctnal Srnice Funde�(Continued)
D. Asseb,LlabWtla and Net Auets or Eqnity
Padc Aseeta Fimd—'lbis Fimd accounta for the City's fanda accwnulated for tde replacement of park
��• 1. Deposib and iavatmcab
Employee Benefits Fimd—This Fund eccoante for the Cit�e funde e�ecumWated for c�mpenaatod The City's cagh and eaah eqwvaleats are conaiderod to be caah on hanei,demand deposits aad laghly
absencea and OPEB. Iiquid debt instrumenta purcheaed with original mahuiqea of thra months or less from the date of
acquisition. lnvestraents a�s stated at fair valuc.
Wormation Txhnology—This Fuod accowus for the City'e fimds accumulated for infocmation
technotogy rcsourcea. Minnerota Stmutes authorizes thc City to invest in obligetions of the U.S.Treasury,ag�cies and
instrumentalities,sherea of investment companies whose only investments are in the aforementioned
Fiduciary Fuad: securities,obligetioaa of the State of Minaeeota or its manicipalities,bankers'acceptances,fuwre
conUacts,repurchaee and revesse�epuahese agreemrnts md comme�ial paper of the higheat quality
C Escrow Agency Fund—This Fund accouata for the moniaa held for apxific purposea for individuals, with a mahuity of no longer than 270 days and in the Minnesota Municipal Money Market Fund.
—� privato orgenizations,other goveromeut unite and other flmde. Eacrows aze held on behelf of
� buitders and developecs,for savrity deposits end lice cvidence
po deposits, The Minaesota Muaicipal Money Markd Fluid is an actemat investmcnt pool not re�steted with the
Sxurities Exchenge Commission(SEC'�that followa the seme regulatory tu]es of the SEC imda
All of the City's intemal aervice funde aro govemmentei in nature and ue combined with govanmrntal Rule 2.a.7. The fair value of the position in the pool is the Bame as the velue of the pool shazes.
actividet in the govanment-wide finaacial statemen4.
The City's investrnrnt po)icy for all Rmds except the Elxtric and Water Entaprix Funda(Shakopx
Privato-sector standarda of accoundng end 6nencisl reporting issued prior to Decemba 1,1989, Public Utilities Commission)addrexses cuatodial credit risk for deposits. The policy also eddrssscs
gcnerally are followod in both the govemment-wide eod proprietary fimd finsacial statements to tha credit rialc,intenst rate risk,concentration of credit riak a�d custodial eredit risk for investrnents.
extent that thoae standerde do not watlict with or contradict guidance of the GASB. Governments also The Cit}rs Electric and Water Entaprise Funds(Shakopee Public Udtilics Comrt�ission)also have a
have the option of following subeequent privsto-eector guidance for their businese-rype activities and focma!policy to eddross all of these rieks except custodial credit risk for investments.
entecprise fUnds,aubjeet to t6is aeme limitetioo. The City haa elected not to follow eubsequent privato- Custodial Credit Rie{c—D y
extor guidance. epoeitn: Thie ia the risk that in the event of a bank fail�uc,the Cit 's
depoeila may not be retumed to it. Minnesota Statures requuo all deposits be protected by federal
As a goneral iule,the effect of interfiad activity has been eliminated$om the govemment-wide depo�it insivance,coiponte suraty bonds or collatexal. The market value of collateral plcdged must
financiel etatements. Exeeptions W this general nile are paymeats,where the amounte ere reasonably equal 110%of deposits not covered by Federal Depasit Insutance Cocporation(FDIG�inaurance or
equivalent in value to the interfund sarvias proridod and other chmgea betweea the City's uHliry ���$�Y�nds and letters of ctedit. The City's invesOmari poticy and the invesmirnt policy
function a�varioua other functione of the Ciry. Elimination of thee�chugos would dietort the direct for the Ciry's ElaKric and Water Entecpriae Fimde(Shalcopee Public Udtitia Commiesion)state
coste and pmgam reveauea reported fot the vazious fimctions concernod. deposita must be collataalized in order ta camply with Mtnnesora Statutes.
Proprietsry funde distinguiah opecating tevenuee and expenses from nonoperating iteme. Ope�ating Ciedit Risk: Thia is the riak that en issua or otha countecpacty to en investment will not fulfill its
revenues and cxpa�aa genently result&om providing servica and producing and de6vaing goods in obligadon to the holder of the investrnenl. Mlnnesota Surtutes 118A.04 and t 88A.OS limit
connection with a proprietary fimd'e principal ongoing operations. The principal opanting revenuea of investenmp that are ia the Wp two ratiogs issued by nationally rabgnized statistical rating
the ente�pria fuads aze charges to customeaa fot eales aad seivicas. Opereting expensee for enteiprise ar8anizations. The City's inveatment policy nfe:ences Mtnnesora Storute.r and fiutha limits tho
fimda include the cost of seles and servicos,edmioistrative expeases end depreeiation on capital assets. typea of invesomenta that tho City ia allowed to invest in. The invcshnent policy for the City's
All rcvenues and expenses not moeting ffiia definition are reported as nonoperating revenues and Electric and Weter Entecprise Funds(Shekopa Public Utilitia Comaussion)also de6nes suitable
expenses, aad authorized invesanenta end related minimum ratings.
CITY OF SHAKOPEE ClTY OF SBAKOPEE
NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FIPIANCIAL 3TATEMENTS
Deeembcr 3l,2010 Ikeember 31,2010
NO'IT 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NOTE 1—SUN[MARY OF SIGPIIFICANT ACCOUNTING POLICIES
D. A��et�,L.tsbilitlea and Net Aeud or Eqatty(Contlnued) D. Aneh,Liabllitla asd Net Atseb or�quity(Contlunal)
I. Depwlb�nd Investmenb(Contlnued) 2. Recetv�bla and Psyabla
Intercst Rate Rie1c: 7Lis is the risk thet changes in market interest tates will sdvetsely affect the fair Activity betwan fitnds that are representative of leodinK/borrowing artangcments outstanding at the
value of an investroent The City's policy states the investment portfolio shall be designed with the end of the fiscel yeat are refernd to es"advances to/from other fand.9". All olher oulstanding
objxtive of attaining a merkd rste of return throughout budgetary aad xonomic cycles,taldng into balances betwan tUnds are teporied as"due to/fmm other funds". My residusl balances
account the investment risic coneaainu and liquidity needs. To the extent poss�'ble,the City s6a11 outstanding between the govemma�tal activities and business-rype activities are reportod in the
attempt W match its inveehnents in ahort-tetm aperating funds with anricipated cash flow govemmeut-wide fnencial statements as"interfund balances".
requiremrnts. Unless matched to a specific cash flow,the City will not d'uectly invtst in eavritiea
mat�uing mon than ten yeazs from the dete of purchese. Long-tetm funda s6a11 not be investdd in All ttede and pmpetty tax receivablcs ere shown at a gross amount aince both ere assessable to the
securities excocding 10 ytars in modified duration,at time of purchase. 'Che investmmt policy for property taxes and are colixdbie upon the sale of the property.
the City's Electric end Water Enteiprise Funds(Skiakopee Public Udlities Commission)eddresses
thie risk by requiring holding of securiNes to maturity(subjxt to certsin excepdons)and limiting The City levies its property taz for the subsequent year during the month of December. December 28
maturity constrainls to a relatively short duration. is the last day the City can cerlify a tax levy to the Counry Auditor for co(txtion the following year.
Such taxes become a lien on January 1�d are ra:arded as receivables by the Ciry at thet date. The
< Conoentration of Credit Risk: Thie is the risk of loss amibutcd to the magnitude of an investrnent ia property tax is recorded as revenue when it bxomes measursble and available. Scott County is the
� a single issuer. According to the City's invesUnent policy,the aggegate investrnent poAfolio shall collecting agency for the levy and romits the colloctione to the City thrce times a yeaz. The tax levy
0o be diversiSed by: �rotice is meilai in March with the 61st helf of the payment due on May 15 and lhe sevond half due
on Oetoba 15. Taxes nol eollected as of Decernber 31 eac6 year are s6own ac ddinquent ta�ces
• I..imiting invcstments to avoid over concentration in eocuriries from a specific issuer or raxivable.
business sector.
• Limiting invesUaaits in socuriries that have higher crcdit risks. The County Audiwr prepares ihe tax list for all taxable prop�Ry in the City,applying the appliceble
. Investin in securities with n matuririea. tax rate to U+e tau capacity of individuel properties,to azrive at the actual tax for each property. The
8 � g Counry Audiwr also colleds ell special assessments,eacept for certain prepayments peid ditectly to
• Continuously invesdng a portion of the portfolio in readily availeble funds,euch as I.ocal
Govemment Investment Pools(I.GIP),money markd funds or repumhase agednents to �C�n'•
ensvro approptiato liquidity is maintainod in order W meet ongoing obligations.
• Having all investrnents,other t6an thou in direct obligations or agencies of the United Statee, The County Audilor submits the list of taxea and speeial assessments to be collxted un each parcel
secuted by co]lateral or repurichase agoanents,shell not exaed 50'/e of the aggregate of property W the County Treasurrr in Janunry of each year.
investrnent portfolio. Mortgage becked xcuriries shall not e�cceod 35%of the aggcgeu 3. lnveatory,Prep�ld Item�and Othtr Aaset�
investment portfolio,at the time of investment(i.e.,commercial psper or benkers'
���)• Certain payments to vrndors refloct costs applicable to future accounting periods aad are recotded as
• Limiting investments in aay one cotpotation to 5%of the aggregate investmrnt portfolio. pr�paid items in both govetnment-wide and fund financiel statements. Other as.uts inciude
'Ihe imestment policy for the City's Electric and Water Enterprise Funds(Shakopee Public Utilities ���+zed debt issuance c�sts for the Electric and Wata Entetprise Funds.
Commiuion)defina suitable aod authorizod investments and celated minimum ratings as well as ]����ries of enterprise funds are valuod et average cost using tlie fiist in,first out(FIFO)method.
application of prudent person stendarde in eonsituction of portfolio manageroent and diversification. Invantories of governmenta]fimds ere not recorded at year-end oa the Balance Sheds 6ecause thcy
Cuatodial Crsdit Risk—Investmrnta: For an iavcstment,tiva is the risk that in the eveat of the 8�����nsignificant inventaries.
failure of the counterpazty,the City will not be able to recova the value of its investmwts or 4. Ratrtcted Asaeh
collateral aecwities that are in the possession of aa outeide party. The City's inves�rnt policy states
all securities purcheud,including appropriate coltateral,s6a11 be placed with an indeprndent third Certain cash and investmente in the rnteryrise funds ere classified a9 restricted. The Electric Fuod
parry for custodial safekeeping. has monies restrictod for customa deposits and debt service. The Watu Ftuid has manies restrictcd
for wrter production and trunk distribution facility acquieition,based on trunk an�wnnection fecs
oolleaed from users,construction projects and debt service.
CITY OF SEiAKOPEE CITY OF SPAKOPEE
NOTES TO THE FINANCIAL STATEMENTS NOTES TO TAE FINANCIAL STATEMENTS
Deeeatber 3l,1010 Dccember 31,2010
NOTE 1—SUMMARY OF SIG1vIFICANT ACCOUNTING POLICIES NOTE 1—SUMMARY OF SIGN[FICANT ACCOUNTING POLICIES
D. Asab,Liabilides and Net Asxd or Eqnfty(Coatlnued) D. Aaets,Liabllttle��ad Nd Ateeb or Eqaky(Condnned)
5. Capitsl Aecets 7. Lon�-Term Obligatlons
Capita]usete,which include propetty,plaut,oquipment end infrastructure asseta(e,g„roada, In the govetnment-wide financial atatements and proprietary fund types in tha fund financial
sidewallcs and eimilar items),�e reporied in the applicable gova�nental or business-type actirities scatanents,loog-tam debt and otha long-term obligations az�e repotted as liabilitias in the applicable
columne in the govemment-wide 6naocial statementa. Capital avsets are defiaed by the City, govanmmtai activities,business-type activida ur Proprietary fund type Statement of Net Assets.
e�ccluding the Electric and Water Enteipriu Funde(Shekopeo Public UNlitid Commission),as essets Ente¢prise fimd bond premiums aod disoounts,as well ea issuance costs,are deferrod and amortized
wilh en initiel,iadividuat cost of more than S 5,000 and an estimated useful life in excess of one over the life of the bonds using the effective intaest method. Bondg payable are reported nd of the
year. Capital aesets for t6e Elect�ic and Wala Eaterprise Funds(Shekopee Public Utilities applicable bond ptemium or disconnt. Bond iasuance costs are repoetod as doferred charges and
Commission)ane defincd as assets with an initial,individual cost of more than S 1,000 and an arnottized ova the term of the related debt
estimaced useful life in ezcess of one yeaz. Such essets ere reoorded at historicel cost or estimeced
historical cost if piuchased or consCUC�d. Donatod capital assUS m�e rccorded at�stimated fair In the fund financial slatements,govemm�tal fund types rcoognize bond premiums and diseounts,
market value at the datc of dooation. ar well as band issuauce costs,during thc cument period. 11�e face amount of dcbt issued is reported
The wsts of normal maintenance and repaira that do not add tp tbe vduc of the asset or malaiall as other finaacing sources. Preroiums received on debt issuaacp aro reported as other financing
uteod assets lives are not capitalized. Y �um�s a'hile discounts on debt issuances are reportcd es other financing uses. Issuance costs,
< whethv or aot withf�dd from the actual debt procads receivod,are reportod aa eapenditures.
� Property,plant and equipment of the City aze depr�ciatod using the strsight-line method ova the 8. Fuod Eqaity
following e.titimated useful lives.
Assets y� A. Claadficstloo
Buildings 30.50 In the fund financial affitements,governmmtal funds report fimd classifications that comprise a
Park Buildings 30 hierazcDy based primarily on the extcnt w which the City is bond to honor conslrainta on the
speci6c purpose for which amounta in those Ponds can be spent. Non-spendable fund balances
Building lmprovanents ZS include�ounb that cannot be speat bccausc they arc not in spendable torm. Amounts that are
Light Vehicles 4-10 restrictod W aped6c purpoacs citha by a)consheints placod on thc use of resources by craiitory,
Machinery and Equipment �Zp �antors,contributara,or laws or regulationa of other govemments or b)im}wsad by law through
Utility Distributioa System 50-75 wabling le�sletion ere classified as restricted fund balances. Amounts ihat can only be usod for
����e 30-50 specific p�uposes pursuant W constraintn imposed by the City Council(highest level of decision
maidug authority)ihrough resolution me clessified as committod fuad balances. Amo�mts that
Fire Truc�s 20.25 at+e coastrained by the City's intent to be ased for specific purpous but aze neitha roatricted nor
committed are classificd as essigned fu�d balances. Assigrunents are made by the City's finance
6. Compeo�ated Ab�eneee Director basod on U►e City CounciPs direction. Unassigned fund balance represents fund balancc
that has not been assignad to other fimds end that hae not boen restrictod,commiued or�aigned
Vacation and sick leavc benefits are tecorded as expenditures in the Employee Benefits Intemal to n npacific ptrrpose in the Gene�xl Fimd. '[he City's policy is to consider umsstricted fund
Service Fuad end guvernmental funds when t6e obligations have mahued and are c�tpected ta be balana W be sprnt by City Council action,appropriations or emcrgency situadons.
liquidated with ezpendable fw�mcial resources. City employoes eacn vacation time basod on yws
of City service. Employas w6o have 0 to I S ycazs of employment may acc�ulete no more than 8. Minla�om F�wd Balance
240 haus. Employees w6o heve 16 or moro yeacs of service may accumulatc no more thaa 360
hours of vacation lesve. Upon tumination,cmployces wili receive oompensation for aU unused The City's target Gencral Fund balance is to maintain an unassigncd lcvc!betw�eea 40%
vacadon. Employcea eam sic{c leave and may ac�umulate to a maxitnum of 960 hours. The City (minimum)and 45'/0 of curnnt yeaz expenditurcs. This level is to provide woticing capital for
mmprnsatee employ�cs who leeve muaicipet service al the rete of 45°h up to l5 years of serviee. cash 8ow,mcpeeted decline in revenues and unfonseea expenditurcs sach aa naturel disastera.
After 15 years of setvice,employas who leave are compensated at the rate of 55%plus 2%for each Replenishing fund belance when it falls below the target level shall be accomplished by interfund
ycer of service beyond 15 years up W 75%of unused sick leave. transfas or budgeting for expenditures and otha usea to be less than revrnues or other sources
ova a period not to e�cceod thra years.
C[TY OF SHAKOPrE CITY OF BHAKOPEE
NOTES TO THE 1�7PiANCIAL STATEMENT3 NOTE3 TO THE FINANCIAL STATEMENTS
December 3!,2010 December 31,2010
NOTE 1—SUMMARY OF SIGMFICAPIT ACCOUNTIIVG POLICIES NOTE 3—STEWARDSAIP,COMPLL4IVCE AND ACCOlJ1VTABIL[TY
D. Meeb,Llab(GtIa and Net Aateb or Eqaity(Costlaoe� A. Budgetary Informatlon
9. Net Asu4 Budgets aze adopted on a basis consistent with U.S.genecally accepted accounting principles. Annually
eppropriated budgcra sro adopted for tha Ganecal Fl►nd and the Shakopce EDA,Traaeit,
Net essete represent the difference betwan aeseu end liabilities in the govemment-wide Sn�cial Telxommunicatione and Rocrcation Spocial Revenue FY�nds. The Fodeiture blwd is not requiied w have a
statemente. Net asuta investod in cepital aesets,net of nlatod deM oonaiats of capital�nset�,net of budget adopted All activity in this Fuad is at the diacretion of the Chief of Police.
acciunulated depreeiation,reduced by tha outstaading bal�co of any long-tcam debt used to build or
acquire the capital assets. Net aeeeta are reporced a��eah�icted in the Bovemment-widc fwencial Budgeted amounb prescat the ori�nally adopted budget and final amended budget a�roved by the Ciry
statement when there are limitations on thcir uso through external restrictione imposad by creditoca, Council. The City does not use ancumbia�kea. Budgeted eacpenditure appropriatioas lapae st year-end.
gantocs or lawa or mgulations of other govenunenta.
1. In August of each year,City staffsubmit�W the City Co�cil,a propoaed ope�ating budgd for
t0.Use o(EaHm�ta the fiscal year commencing the following Janu�y 1. The operating budget includea proposed
expenditures and the means of Anancing Wem for the upcommg yesr.
'it�e prepuation of financial statements in coafosmity with U.S.generally accepted accountinB 2. Public hearings are co�d�to obtain taxpayer commenta.
principlea requirce managcment to make ertimstes and aenumpdona thsat affoct the reported amounts 3. Tha budget ie legally eascted through paseage o1'a nsolution aRa obtaining taxpayer commeats.
of essets and liabilities aad disebsure of cantingent wsets wd►iabilides st tl�e data of tho 5neocial 4. Expenditures may not legally excad budgetod appropriations at the division level. No fund'e
< statemente. Estimeees also affect the reported unounw of nvenue and expenditutrs/expenso during budgd can be increased without City Council epp�oval. The City Cooncil may authoriu transfer
, the reporting period. Actual raults could diffa from ffiose estimates. of budgeud amounts betwan divisions widun any fimd. Managanent may amead budgds
o within e division level,so long ae tho total division budget is not changed.
NOTE 2—RECONCILIA710N OF GOVERNMENT-WIDE AND FUND FINANC[AL 5. Annua]budgets are adopted for the Genaal aad applicable Special Revenue Funds. Annual
STATLMENTS appropriated budgets m not adopted for Debt Service Fl�nde because effxtive budgetary control
ie alternadvoly achieved through bond mdenttae provisiona Budgetary control for Capital
A. E�lanatbe of DlNfereoce betwan tYe Proprktary Ftind Shtemeeb ot Revauet Ezpea�a projecte F1mds is accomplished tluough the use of project controls and budgete are not adopted.
and ChanQa in PY�nd 1Vet Aseets snd the Governnent-Wlde Statement of Acdvitkf 6. Budgeted amounts are as originally adopted or ae emonded by the City Councit. Individual
amendments wecz noc materiel in nlation W the original amouuts budgetod,eucept for transfect
The proprietazy fimd Statement of Revernies,Expencea and Changes in Fimd Net Aeaeu shows the total in the Gene�al,Telecommunication and Rcereation Funds.
change in the internal eervice funds which are all related to govemmental ectivitiea. tn the prior yeaza,
the Employee Benefit Intunal Se�vice Fund reported a IiabiGty for net other post employment liabili6ea NOTE 4—DEPOSITS AND�TVE5TMEIVTS
Dwing 2010,the City recleasified ite Net OPEB liability from the intemal service fund.
A. Depoeib
Intemal sorvice fluids rn uoed by maoegemenl to charge the cosls of certain In accord�ce with applicable Minnesota Statutes,the Ciiy maintaic�deposits at depositary banka
activiries auch es buildinga,equipment,Pack assete and employa beaeffte to aathorized by the City Council.
individual funds. This amowt represaits the chsnge in nd asads of the i�anal
savice funda,wluch atl is r�ported with govanmental ectivitiee. S 2,679,964 C�stodia!Credit Riek: As of Decemba 31,2010,the City's bank balancea,including the Elxtric and
Watc Ente�prise F�mds(Shakopa Publie Utilities Commisuon),wero not acpoeed W custodial crodit
Govert�meatal Acitivty Net OPEB Obligaaon (420,884) risk becauee they waro insiued fhtnugh FDIC ead properly collateralized with sxuritiea held by the
pledging Snaaciel institutiona'trust doparomente or agents ia the Ciry's name.
Net adjushneat w fncreese Net Change in Fimd Balances-Totel Gavemmeatal As of December 31,2010,the City had the following depoeits:
Funds to azricc at Chenges in N�Assels of Governmental Activitiea S 2�59.OBU
Deposits(All Funds but the Elxtric and S 326,934
Water Entecprise Fw�ds
Deposits(Elxtric and Weter Ente�priee Fue►de) L0,601,685
Totat DeposiU S 10,928,619
��
CITY OF SHAKOPEE CITY OF SHAKOPEE
NOTES TO TtIE F[NANCIAL STATEMENTS NOTES TO THE FINANG'iAL 3TATEMENTS
December 31.ZO10 Deee�ber 31,2010
NOTE 4—DF,POSIT'S AND INVESTMENTS NOTE 4—D�POSIT9 AND INVESTMENT9
B. Investmend B. Invafineeb(Coodnued)
As of Dxember 31,2010,the City held the fotlowing invescments,excluding the Electric and Water As of Decembe 31,2010,the City had the following imestments held in the Elechic and Water
Enkrprise Funds(Shakopa Public Ufillties Commission):
Enteq�riee Funds(SGakopa Public Utilitiea Commiesion).
Modified Years w Matiaity
Duntion Moody's ��
Fair Value (Year�) Reh�'n Concentradon Rating Fair Value One Yeu i-5 Years
U.S.Tteasury Notw S 16,702,789 2.87 Aea 22•2% U.S Agcnciee AAA S ]0,684,653 S 3,364,333 S 7,3Z0,320
A�n���s� U.S.Tceasuries AAA 8,408,985 474,284 7,934,701
FAIvIC 1,026,950 0.53 Aaa 1.4% ExtenlslltivCBtm�tPoo1 N/A 1,129,112 1,129,112
FFCB 2,638,185 2.55 Aae 3.5'/0 � MerkaFund N/A 70,532 70,532
FHI,B 2,366,631 2.41 Aaa 3.1•/. °�
FHLMC 755,631 0.30 Aee 1•0'/o Total S 20,293,281 S 5,038,261 S 15,255,021
�A 2,356,018 0.67 Aea 3.1% �� �� ��
� Agency Step-Up Bonds:
N �,g 5,9���Z60 �O6 p� �9,�o Cuawdial GYedit Risk—Investmente: As of Docemba 31,2010,all investrna�te of the City and the
� FFQ.MC 3,9B7,930 I.10 Aea 5.3% Electric aod Water Enterprise Funda(Shakopa Public Utilities Commission)were insurod,registerod
FNMA 11,428,090 1.06 Asfl 15.2%
aad held by tho Ciry or ita agent and in the City'e name.
Mortgage Honds: Concenhatian of Credit Riek: Aa of December 31,2010,tha City held inv�atment�that cxceeded 5°b of
CMO 1,512,793 0.99 Aea 2.0% its totsl invatmente for all funda accluding t6e Elxtric and Water Enterprise Fw►ds(Shskopoe Public
FFII.MC 2,872,290 2.57 Aea 3.8% Utilitiee Commission).
FNMA 2,461,75I 238 Aae 3.3% 'I'he City'e Electric md Water Entecpcise Funds(Shakopee Public Utili6es Commission)invwtrnents in
oNH'1A 153,017 131 Aae 0.2% �,g��,fA a�d FHLMC also exceedod S%of the total investrnente of those Cunds at Dxember 31,
Diacount Notes 5,999,480 0.12 Aea 8.0% 2010.
Commercial Paper 1,893,694 0.55 Pi 2.5%
Municipal Bonds 8,468,223 2.45 Aal-Bael 1 l.3°/. 'Ibe fotbwing is a summery of totel deposits md invamoenta se of Decanbcr 31,2010:
Certificates of Deposit 3,258,430 1.87 NR 43%
Money Mazket Funds 1,357,937 N/A NR 1.8% Deposib(Note 3.A.) S 10,928,619
Investmenb(Elxtric ead Water Enterpriso rludo) 20,293,282
Totsl Investrnenb S�TS,15� � Iavenmcnta(All FLnda but the Electric and
Wuer Eme�pxiae Funde) 75,157,099
Petty Cash 2.830
Total Depoeiti end Investrriente S 106,361,830
CITY OF SHAKOPEE CITY OF SHAKOPEE
1VOTES TO THE FIIVANCIAL STATEMENTS NOTE3 TO THE F[NANCIAL STATEMENTS
Dccember 31,2010 December 31,2010
NOTE 4—DEPOSITS AND INVESTMENTS NOTE 6—CAPTTAL AS6ETS
B, Investmenls(Continaed) Capital asset activity For the year eaded Dacember 31,2U10 wat a�tollows:
Depoeits md investmenta ero preseated in the December 31,2010 baeic financial ttatemettW u followe: ��n8 �g
Balu�oe Increasa Dec�asess Balnex
Stacement of Net Aeseta: c)ovemmenrat Aedviries:
Cash and Inveatrnent� S 98,125,466 Capital Aaee�na being
Re9tricted and Other Accounta 6,506,765 ����
I,nd S 19,169,UO S 16,900 S - S 19.488.040
Statemcnt of Fiduciary Net Asaets 1,749,597 �a�++�+����` 146.�02 �29,343 t46,7oz �29,3a3
Toat Capital Aseaa
Total Cash and Investmente S 106,381,830 ��beinB Deprecisted 19�842 748,243 146.702 7A.217,383
��
c.picat nsset�beiaQ
NOTE S—RECEIVABLESJDEFERRED REVENUE peptxivad:
Govecnma►tal fuads defesed revenue in co�ection with receivables for revmues tLat ece not B'��1°&' 33,592,118 107,936 1 t,076 33,688,980
reP� (nfrrmuct�ue 127,752,351 2,248,645 130,000,996
considerod to be aveilable to tiquidate 6abiGdes of the cunent paiod. Govetnmantel Pands also defer ��y�Equipment 13,192,061 1,012,492 906,958 13,297,395
� mvenue rocogaitioa in cormection with rceourcea tlmt havo bew tecoivod,but not yet eamal. At the end Total Cepital A�et�
�N of the current Sscal year,the various oomponents of defen�ed reveaue repoRed in tht govemmental �p��� ���,536,530 3.369,075 918,034 176987.571
fimds were ae followe:
Dolinquent Delinquatt Defecred L.en A`x°mul�ted
Peoperty Specist Special �"�'O°fOf'
Taxes Aseessments Aeseasmenta Total H'��gi 7,723,387 896,158 8>395 8,611,150
I�asnuchue 48,213,623 4,246,003 32,459,626
M�ct�inery md Equipment 5,163,214 888.419 332,607 5,519A26
General Fund S 303>598 S 4,684 S 50,464 S 360,746 Total Accumulned
2004AImprovemantBonda - - 2,169,496 2,169,496 Depreciation 6t,1oo.2?A 6.030,580 541,002 66,SS9,802
NotunajorFunds 5,026 26,105 3,805,145 3,836,2�6
Total Capiul Asset9 being
Total S 310,624 S 30,789 S 6,025,105 S 6,366,518 Deprociatcd,Nd 113,436,306 (2,661,505) 377,032 110,397,�69
�� � �
Oovao�W Activitid Cspital
Asmeta,Net S 133.�8 S (19131621 S 52 734 S 130.615.152
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IV-23
CITY OF 3HAKOPEE C1TY OF SEIAKOPEE
NOTE6 TO THE FINANCIAL STATEMENTS NOTES TO TEiE F[NANCIAL STATEMENCS
Decsmber 31,2010 December 31,2010
NOTE 7—LONGTERM DEBT PiOTE'1—LONGTERM DEBT
C. Componeob of Long-Term Uabilitla D. C6aaga ia Lon`-Tcrm LisbilHia
t� t�e o� F�r nt�� n�w;m� Long-t�m liability intvrmation for the ye�wded Decembu 31,20l 0 was as followa.
Dm Ritw bwe MtmiH Ou� Om Yar
Coret�mul AtM�IUa: Begimm��j �B
O.O.Boodr. g�luwe Additicy Re�etioro Bdana
G.O.Impo.m�mt Boodr
2000A 09/19A0 �.ISlN.9S% f 1360,000 0]!Ol/11 f 223,000 S 22l,000 �'��Aetivitin:
2003A O)AIA3 20l43.0% 2,313,000 0?!01/U 66.7,000 {63,000 Ba�dr P�y�blt.
1001A OSAll04 1.25l44.10;4 {,223.t100 VLGI/LS 2,133,000 1lS,000 G.0.9ond� f 20,953,000 t 1,553,000 f 3,800,000 S IB,710,000
]OWC lINIA1 3.MH.0% 3.570,000 0]NI/IS 1,270.000 ZS0,000 �O��A� 1.562.�20 610.720 703.270 1.669,770
3006A 07AV06 1.00% 3.140.000 O�Ml/17 2,�90.000 3�0.000
200TA 07A1107 �.ODX 1,3)0,000 01/Ol/17 1,040,000 110.00o TaWOovanme�SAcrivitia S T231�320 S 2.J63.T1A S 4.SOJ.270 S 20379.770
2007B 09AIN7 4.00% I.MS.000 0]Nl/11 1,1t3,000 113.000
200lA 09NIr01 3.3l44.0X 1,170,000 07/D1/19 1,lD5,000 190,000 B�u�ds-TypeAcdvitia:
2010A OAAI/10 0.3%-29% 1,533,000 07/Dt!!1 1�35,000 30,000 Revmae Bondr S 22,235,000 f - S 765,000 S 21,470,000
G.O.&rilmng Retmdin� Unuoortiaed Bond Pranium 79,682 - 4,71 S 34,967
Hood�20WB OS+O�A1 22SX-4.Wlt 2,TT3.000 OL01l1'1 1A30.000 Ii5.000 U�witizedlmsmReflu�din` (1,197,32t) • (68,�35) (1,126.886)
G.O.C�iN tmpmra�wu Cqp�Ap�y,y 36.114 43,842 36.000 6.5.956
Hood�20D4D IINIA/ 2.SMl.2% Q000,000 07/OIf25 �910.OD0 250,D00
� Totd 0.0.Hood� It,710.000 2,SW,000
� Tonl Bu�IDw-7ype Aqivida S 21.173.475 S 43.842 S �J72l0 S ?A.442.037
N Cumpm�red Ah�ca 1.669.T/0 730.000
� The Genaal Fund,Employa Benefits Internal5ervicx Fuad end Sewer and Storm Drainage Entaprise
Tow ao�,t Funda typicalty liquidste the liability related to compensatcd absences.
AcbriEa f 2�3�9.� S 3313.000
8�.�,�,��,;,;� E. GovaromeeW Acdvity G.O.Bonds
Rcvare Bood�tnol�diny
R�r�eooa�: Debt urvice to matarity for outstending G.O.bo�a is ea follows:
eom.2oo�� osro�ro� zssx�.+sx s a,3u,000 w+o�nt s �,oss.000 s 2z0.�
Bo�20MA IOi07ro/ �JYv1.3% 9,a30.� Ov0146 9.200,OOD 223,000 Yw Eodmg
Bood�2006A 11/21/06 4.12SY.-t373K IO,J70,000 07/OIqO 10.Z{5.000 333.000
rout x.Ye��,e som. �i,4�o,000 �ao,000 D�ember 31. Prineipel Inu�ect ToW
Unmo�tlzaa►ou on Renmamg (�.12a.686) (68.s341 201 I S 2,565,000 S 658,232 S 3,223,232
u�rnon�deoodPemi� 3b9s� +,71s Zp�q 1,950,000 580,869 2,530,869
Coaqem�cd AEKOea 65.936 35,000
2013 2,070,000 512,176 2,582,176
Ta.ie�o..-ryP. 2014 2,050,000 438,850 2,488,850
Acuvitia S 10.a�2077 f TJl.zel 2015 2,020,000 364,065 2,384,065
Long-tam bonded indebtodneas listed above were ieaued to finance ecquisi6on and consttuction of 2016-2020 5,540,000 987,772 6,527,772
capital facilitios or W refirunu(refund)previons bood issuea. 2021-2025 2.515.000 286,724 2,801,724
Total S 18.710,000 S 3.828,688 �22.538.688
�.� ��.� °
CITY OF SHAKOPEE CITY OF SSAKOPEE
NOTES TO THE FllVANC1AL STATEMENTS NIOTF.S TO THE FINANCIAL STATEMENTS
December 3�,2010 Dccember 31,2010
NOTE 7—LONGTERM DEBT NOTE 9—PLEDGWG AGREEMENTS
F. B�sineae-Type Atttvily Revmue Bondi The City ha+plodged ite tuing suthority W bacic certain revenue bonds iesued by the Scott Counry
Comatunity Dcvelopmcat Agency(CDA),fom�ally Imown es the Scott County Houeing and
Debt ae[vice W matutity for outatmd'mg nvenue bondt is as followe: Rodevclopmcut Authority(HRA),for the Hlocks 3 and 4 redevelopmmt project in downtown Shetcopee.
Y�E� Refunding bonda were ieaued during 2006 to edvance rofimd the 1997A,1997D and 1997E Serios Bonds
8 on their call datea. The 1997D Series Bonds were called an September I,2006 md the 1997A and
December 31, Principal Intarest Total 1997E Seria Honds were called on Febniary 1,2008.
20]1 S 780,000 3 907,232 S 1,687,232 • Scott Coumy CDA Housiug Dovelopment Refunding Revenue Bonde,Series 2006A,the amount
2012 830,000 876,541 1,706,541 ie S 3,260,000 and paymanls are echeduled from Febntazy 1,200T ta 2027,with into�est ranging
2013 825,000 844,411 1,669,511 from 4.25%to 4.5%.
2014 875,000 811,044 I,6fl6,044 • Scott County CDA Howing Development Refimding Revarue Bonda,Series 2006D,the ammmt
1015 890,000 772,913 1,662,913 ie S 905,000 and psywents aro schoduled�om Feb�nery i,2007 to 2018,with intmeat ranging
201�2020 5,115,000 3,230,859 8,345,859 from S.�°/s to 6.25%.
2021-2025 6,420,000 1,996,042 8,416,042
202fr2030 5,735,000 540.562 6,275,562 • Scott Counry CDA Housing Developmcnt Refunding Revenue Bonds,Series 2006E,the amotmt
� ie S 1,225.000 and paymente are cchedulad from Febn�ary 1,2018 to 2024,with intereat ranginB
' Total S 21,470,000 S 9,979,704 S 31,4-09,704 from 4.5%to 4.7%.
N �� �s ���
U1
NOTE 8—CONDUIT DEBT OBLIGATIONS T6e City lus pledgod ils taaing suthority W back a eeriea of revenue bonde isaued by the Scott County
CDA for the Narth Ridgc Court Redevelopment Projat in downtown Shakopee. The iasue ia:
Conduit debt obligations ate certain limited ob6ga6on revenue bonda or similu debt insUvment+irsued • gcott County CDA Housing Developmeert Revmue Bonda,Seriee 2003,the�ount is
for the express purpose of pmviding capital financing for a rpecific third party. The City hea i�sued s 6,640,000 end payments are acheduled from Feb�uacy t,2006 w 2034,with interest ranging
variow revenue boode to provide fiwding to private-sector tntitiea for projecte deaned to be in the &�om 2.00%to 5.00%.
public interoet. Alffiough theee bonds bear the neme of the City,the City hae no obligation for auch debt
beyond the reeources providod by nlated leaaee or loana. Accordiagly,tl�e bonde are not n;portod ae The City end the Shekopee EDA hava a development agreemait for costs related to ea]magine!Print
Gabi6tiea in the financial steaemmts of the City. Solutiau,facmallylmown as Chall�ge Printing,fscility moving to Shakopee. Tha Shakopa EDA
Aa of Dccember 31,2010,the follo conduit debt was outs issued a Texable Tex Increment Rev�ue Note in tDe amount of S 513,900 in suppo�t of development
� �°g� costs for the Imagine!Print Solutiont project. Imagine!Print Solutione ia the holda of the note. The
Date of Original Amount Balancc So6ak�e EDA is The unitarest on the not ieh6.��P T�ec�ts a�e scheduled�aemi �l� from
Projxt Ieaue of Issue Retired Outstanding August 1,20�ot Febroary 1,2015. � �
SL Fr�cis RMC 10/06/04 S 52,520,000 S 375,OOQ S 49,450,000
St.Fraacis RMC 17J23l87 8,000,000 615,000 3,675,000
St C3ertrudies 09/30/t0 5,675,000 - 5,675,000
Totat S 58,800,000
CITY OF SHAKOPEE CITY OF SHAKOPEE
NOTES TO THE F[NANCIAL STATL+MEN1'S NOTES TO THE F[NAPICIAL STATEMENTS
December 31,2010 Deeember 31,2010
NOTE 9—PLEDGING AGREEMENTS NOTE 12—RISK MANAGEMEPiT
The City end the Shakopce EDA have a development agroement for costs related to Open Syetema T6e Ciry purchasea commer�cial iffiurance coverage t}uough the League of Minnesota Cities Ina�asnce
Facility bcatod'm Shalcopa. T6e Shskopa EDA iasuod a Taxable Tax lncrement Revenue Note ia the Trust(LMCIT)with other citiee in the state which ia a public entity risk pool cumarUy operating as a
emount of S 125,000 ia aupport of development coets for the Open Syetemt Ptojxt Open Syetema ia common tisk manageataR and incurance pro�n. 'Ihe City pays an annusl prsrnium to the LMCTT for
the holder of the note. The Shakopea EDA u liable only to the eatent of thc qx increment mceived 5om it�ineucance covaage. The LMCIT ia xlf-sueiaining tlmough mar►ber premiums end reiaruns through
the Open Systeme pcopeRy. Tlu interat on the note ia 6.0%. Paymants�e achodulod eemiannually commercial companiee for exceas claime. T6e City ie wvered thmugh the pool for eny claime incurred
from Auguet 1,2007 to Fcbruaiy 1,2014. but unroported,but reuins riak for the deducdble portion of its insurance policiav. The amo�mt of theea
deduc4iblea rangee frnm S 2,500 to S S�OOO 8tld 16 COT161aCfCd]iQR18tCi18I t0 1}IC fq18[tC18I 6�CIRCilIB.
NOTE!0—INTERFUND A6SO.TS/LIABiLITIES
Tttere were no eignificant reductions ia insurance fmm the previoue year or settlanente in excese of
'I'6e composition of int�balancxc as of Deceenber 31,2010 is as tollowa: insur�ce covacage for ray of the peat duee 5eca1 yeeis.
Recdvable Fwd Payable Fwd Amoimt Thmugh the pool,the Ciry ie subjcet w r�samaU but due to reeerves and reinsurance wntracts.the
likelihood ia very low. The policy limib through the pool included S 2,000,000 aggregate for tiability,
Gaiernl Fwd WaOet Furd S 90,317 S 1,500,000 for automobile covaage,S 500,000 faithful perfoimaace employee bonding and
General F�aid Noianajor Govemmaital binds 75,000 S 1,000,000 for univereal umbrella covuage. Propaty cove�age ie at apprwcimatcly S 91,0�,000.
Gmcral Pimd IIedcic F�md 69,3i5 N01'E 13—DEFIPiED BENEFiT PENSION PLANS—STATE-W1DE
< Elec�icFu�d SewerF�md 55,88Z
�N,� Water Flmd Stonn Drmnage 18.627 Pnbtic Employeee'Retiromeot A»ocirtlon
Tota] S 309.141 A. Plan Dacriptfon
The due from/due W otha fw�ds bolances repcesent bomowing to cash flaw projecu aad for A11 fu11-time and cettain part-time employees of the City are covered by dafinod bene6t plens
�p��, administerod by the Atblic Employees'Retirement Aesociation of Minnesota(PERA). PERA
administera the Genera!Emptoyees'Retirement Fund(GERF)and the Public Employees'Police and
NOTE 11—INTERFUND TRAN3FERS Firo Fund(PEPFF'),which ere cost-shazing,multiple-employer:stirement plens. These Plans are
establis6ed aad adminiatecod in accordance with Minnesota Statures Chaptecs 353 and 356.
Tiaasferin
��a ��� GERF inambera belong to eitha the Coordinated or Basic Plan. CooTdinated Plan membe�s ere covered
Gmad Govem�t�l Savi« by Social Security and Basic Ptan membeca are not All new members must participate in the
F�md Fuudi Fimds 'fom Coordinatod Plan. AU police officen,firefighters and peace officers who qualify for membership aze
Tc�sfer Out covaed by the PEPFF.
Generd Fund S - S 2,025,000 f 2,371,000 S 4,396,000 p�pmvides retirement benefits as well as disability benefits W membera,md bene5ts to survivots
Nomnejor Grnanmental Fimds 144,400 7,840,003 7984,403 upon death of eGg�ble membas. Benefite are established by slate statute and vest after throe yrars of
bkctric F�md 1,173,056 - - 1,173,056 credited aervice. T6e defined rotiremeot beae6ts are beeed an a memba's highest average ealary for eny
Waoer tlmd 816,330 - - 8]6,350 five succeseive yeazs of allowable service,age ar�d years of crodit at te�mination of servia.
Sewa Fmid 50,000 - - 50.000
Stotm Urainage Futd 50,000 - - 50,000
Inlernal Setvice Fimds 1.100,998 385299 1.486.297
Toml S Z233B06 S 10.966.001 S 27�6.299 _;15�
Transfers were medo according ro budgete for operating putposes,w close funds,to frnence projecta and
for the cancellation of the debt eavice levy.
CITY OF 9HAKOPEE C1TY OF SHAKOPEE
NOTES TO THE FIIYANCIAI.STATEMENTS AIO'CES TO THE FINANCIAL STATEMEIVTS
December 31,2010 December 31,2010
NOTE 13—DEFINED BENEFiT PENSION PLANS—BTATE-WIDE 1VOTE 13—DEFINED BENEFff PEN3ION PLANS—STA1'�WIDE
Public Employee�'Retlrement Awoci�tloa(Contlnued) Pablic Emplvyea'Retlrement Auoclatlon(Condaned)
A. Pla�De�erlpdon(Conttnaed)
B. Pbndln$Pofl¢y
Twa met2mda ate used to computa 6enefits for PERA's Coordineted ead Basic Plea mambets. The Minnesoto SJatutea Chepter 353 seta the iates for arttployer end employee contn'butiona. These Statute9
retiring m�ber zeceives the higha of a etep-rate benefit acetusl formula(Method 1)or a levd accnial ais eatebliahed and amendod by ihe Stato Legielatiu+e. The City makes ermual coatributione to the
formula(Method 2). Under Method 1,the enauity acccuai iate for a Besic Plea member is 2.2%of pen�ioe plaos equa!to the amount rcqwnd by state stalutea. GERF Besic Plan membees end
average salary for each of the fitst 10 yea�s of service and 2.7%for oach remaining year. The annuity Coordinated Plan membece were required W contribute 9.]%and 6.0%,nepecdvely,of their annual
accnial rate for a Coordinated Plan manba is 1.2%of average salary for each of the 6rat 10 yeazs aad cove.red salary in 2010. PEPFF membcs were requirrd W con�bute 9.4%of their annuei covared salary
1.7%for each remaining year. Under Mothod 2,the eanuity eccn�al iate ia 2.7%of averege ealary for in 2010. In 2010,the City was roquimd to wn4ibute the following percentages of annual eovered
Basic Plea memben and 1.7%for Coordinated Plan membets for each year of savice. For PEPFF payroll: 11.78%for Besic Plan memban,7.0%for Coordinated Plen membeis and 14.1%for PEPFF
members,the annuity accrual rate ia 3.0%for each yeat of service. For all GERF and PEPFF members members. The City'a conhibutiona to the Pablic Employoes'Rctiranent Fund for the years ending
hirad prior to July I,1989,wtwse annuity is calculated usiag Method 1,a fh�ll am►uity ie available when December 31,Z010,2009 aad 2008 wat S 549,973,S 516,529 and S 549,973,nspectively. The City's
age plus yaers of eervice equal 90. Nornia!rdirement age ia 53 for PEPFF membere and 65 for Basic conttibutioos to the PEPFF for the yeais ending Docember 31,2010,2009�d 2008 wae S 475,396,
and Cooidinatal Plan membcrs hiied prior to July 1,1984. Nomial reGremmt age is the age for S 484,519 end S 415,440,reepectively. The City'o contributione were equal to thc wntractually raquirad
uneeducod Social Sxtuity bene5ta capped at 66 for Cooidinated Plan membeis himd on or after July 1, contn'butiona for eech year as eet by state statute.
� 1989. A reduced ietirema�t sanniry is aleo available to eligible membas eaking early reGrement.
' NOTE 14—DEFINED CONTRDUTION PLAN—STATE-FVmL
V There are diffecent typea of�nuities aveilable to members upon retiremeat. A einglo-life aonuity is a
lifetime annirity that ceaaes upon the death of the retiree—no aurvivor annuity ie payable. There tre also Four Council Membeta of tlte City are covered by the PubGc Employas'Definod Contribution Plan
v�ious types of joint and survivor annuity optione aveilable which will be payable over joinl lives. (PEDCP),a muldple-employer defarced compensuion plm administerod by PERA. T6e PEDCP is a tax
Mmnbe�s may aleo leave thvir con�ibutiona in the Fund upon teeminetion of public xrvice m order to quali5ed plea under SxNon 401(a)of the Intemal Revtnne Code and all contributioas by or on behalf of
qualify for a defened annuiry at rotirement age. Refund�of coatributiona aro svailable at any timc to employees are tax defeared until time of withdrawal.
membara who leavc public acrvice,but before retirement bene6u begin.
The bene6t rovisiona etatod in the oue Plan benefits depend eololy on emounta contr�uted W 1he plaa plus invcahncnt eamings,le4s
p previ puagrephs of thia section are carre�►t pcovieions and apply administcative expensw. Minnesow Statutes Chaptcr 353D.03 specifiea the employa snd employer
to active Plan pazticipants. Vested,tenninsted employas who�e entiUed to ben�6ta but are aot yet contribution retas foz those quelified personnel who elect to pe�ticipate. An eligible elected official who
rsceiving them are bound by the provisione in effxt at the tima they lest tumineted their public aavico. daides to pazticipate contributea 5%of salary which ie matchcd by the elxted official'e employer.
PERA iesues e ublicl available Snancid Employer aad employa contributions ate combined�d usod to p�uchase shares in ono or more of the
P Y report thst includes ffnaacial statemente and required seven accounte of the Minnosota Supplemental Investment Fund. For adminietering the plan,PERA
supplementary informstion for GERF and PEPFF. That tzpo:t mey be obtained on the Intemet et reccives 2%of employa wntributions and four-tentha of 1%of t6e xaeeta in each membor'a account
www.mnpera.org,by writing W PERA at 60 Empire Drive,/l200,St.Paul,Miaaaots 55103•2088 or bY annnally.
calling(651)296-7460 or(800)652-9026.
Total contributions made by the City duting fiscal year 2010 were:
Contriburion Amount Pvicentage of Coveeed Payroq Rcquiied
Emplo�a Employer Employa Fmployer Rates
S 1,064 S 1,064 5% 5% 5%
CITY OF SHAKOPEE CITY OF SHAKOPEE
NOTE3 TO THE FINANCIAL STATEMENTS PIOTES TO TAE FINMICIAL STATENIENTS
Deeember 31,2010 December 31�2010
NOTE 15—DEFINED BENEFIT PENSION PLA1V—9HAKOPEE VOLUNTEER FIItE NOTE 15—DEF[NED BENEFIT PENSION PI.AN—3HAKOPEB VOLUNTEER FIRE
RELIEF ASSOCIATION RELIEF A830CIATTON
A. Plan Dacrlpdaa B. Fauding Pollry(Continued)
The Shekopee Fin Relief Asaociation(the"Assa.iation")is the adminiatrator of a eingle exnployer The Ciry'a annual pension coet for the cuTrant year and relatod infotmation ia ae followe:
de6nod bcnefit pension plan eatabiiahed to provide beneSts for membere of the Shakopa Fire
Depar�ant. Valuation Dau Docanber 31,2010
Actua�id Coet Method Entry Age Normal
The Asaocistion pmvidea ntiremant and dieability b�nefita to membeta,and benefits W eurvivo�a upon pmo�zation Method L,evel annaal dollar closed
the death of eligible membas. Bencfits ue ertabliahed'm accordance with Mlnnerora Statutu. The ���,��on Period:
definod retitoment bene6is are bascd an a member's yeazs of eetvice. Benefit p�ovieione can be
amended by the Association within the pazameters provided by Minnesota Statutes. Nom►al Cost 20 yea�s
Prior Service Cost 10 yeazs
The Association issues a publicly svaileble 8nancial report that includes financial statementa�d Asaet Valuarion Meflwd Maztet
requimd supplemeatary information. That teport may be obtained by writing to Shakopx Fire Reliof Actuarial Assumptions:
Associuion,129 Holma St�ect South,S6akvQee,Minnasota 55379. Investm�t Rate of Retura S%
B. FundlnE Policy Projectod Salmy Increases N/A
< Includa Inflation at N/A
N Minnesom Statuter Chapter 69.772 apaiSes minimum support ntes required oo an annual basis. The Co�of Living Adjusomenta None
� minimum aupport rrtee Gom the municipaliry and from state ud ue determined ea the anount requirod
to mect tha noimel cost plw amoriizing auy existing prior eervica costs over s 10 year period. Acwariel Annual Pe�entage Nd
valuationa are not required for the Association aa the Aseociation follows Minnesom SYatutes for the pension of APC Pension
valuation calculation. The City hu decided to meke an annual contribution in eddiHon to�tate aid yeet Ended Cos1(APC) Contributed Obtigation
tsceivad for pension cost. The Assceiation ia comprised of voluntces;thereforq then are no psyrol)
expendiRUes(i.e.,the�e are no covaed payroU porcentage calculations). 11I31/08 S 187,451 100% $ •
Contributiona toteling S 466,399(S 339,752 City of Shakopee and S 126,647 State of Mi�ota)wae 17J31/09 240,169 100% -
mado in accordance with contnbntion roquitimenta as of December 31,ZO10. These contributions were 12/31/10 339,752 100°h -
wtucly for nocmal service cosL
Statutory 5tatutory Funded
Valustion Value of Acxrued (Unfucsded) Funded
Date Aa�ete Liability(SAL) SAL Ratio
12/31/08 S 2,944,948 S 4,81�,784 $ (1,865,836} 61.2%
1?J31/09 3,190,043 4,364,302 (1,174,259) 73.1%
12/31/10 3,690,248 4,507,908 (817,660) 81.9%
1'he Associatioa ie compriaod of volunteeis:thecefore,thare are no payrol!expenditures(i.e.,thtre aro
no covered payroll amoimta or pe�entage calculationa).
C1TY OF SAAKOPEE CCTY OF SHAKOPEE
NOTES TO THE FINANCIAL STATEMENT9 NOTES TO THE FIiVA1�ICIAL STATEMENTS
Deamber 31,2010 Deeember 31,ZO10
NOTE 16—POST EMPLOYMENT HEALTA BENEFTT6 PLAN NOT�16—POST EMPLOYMENf IiEALTEI BENEFIT3 PLAN
A. Plaa Daerlptlon C. Aonaal OPEH Cwt and Plet OPEB Obll�'don(CondnuM)
The Ciry pmvides a aingle-employa defined benefit health care plen to eli�bie eetirees and their The City'e annual OPEB cosy the pencentage of mnual OPEB cost contributod to the plen and ffie aet
apouua. T6e plan oft'eea medica(covecsgo a�miniataed by Medica. it ie the City's policy to OPEB obtigation for 2010 was as follmvs:
periodicatly review its medical coverage and to obtain requuts for propoeale in�da to provide t6e most
favoreble banefits and preariuma for Ciry employees aad rdirea. Percentage of
B. �eding Polky Fiecal Yoaz Annual OPEB Employar Annual OPEB Net OPEB
End Cost Contribudon Cost Contnbuted Obligatioa
Retines and their epousea contnbute to the health caze plan at Use ume rate as Ciry employoea.Thie
resuhs in the retiroee receiving an implicit rato eub�dy. Contnbutian requirementa ere estabGahed by the 1?l31/10 S 170,040 S 27,020 16% S 579,104
City,bascd on the contract terms with Modica. The required contributioas ate based on projectod pay- 12/31/09 250,175 54,644 229'0 436,084
as-you-go 5nancing cequiremenis. For fiscal y�ar 2010,the City wntributod S 27,020 w the plan. As of 12/31/08 240,553 - 0% 240,553
Januaryr 1,2010,thae were 10 mtircee receiving health benefiU from the City'e health plan.
C. Annad OPEB Co�t and Nct OPEB OWi=�don D. FY�nded Statas aad F�ading ho�rw
N The City's nnnual OPEB cost(eacpeoee)ia calculatod baeed on the annual cequirod contnbution(ARC) As of Jmuary I,2010,tho most rocent setuarial vatustion date,the City hed no aasets depoeited to fund
� of the City,az►emoant acwazially dete�miaed in accocdance with the parametcis of GASB 5tatement tha plan. The actuscial accruod liabiliry for bcmefita wes S],483,810 and the acivaris!valuo of assets was
No.45. The ARC repraeents a level of fund'mg that,if paid on an ongoing besie,ia ptojxted to cover S 0,resu3ting ia an imtl�nded ectuarial accrued liability(UAAL)of S 1,483,810. The covercd psyrol]
nmmal cost each year sad amortize any imfunded ecWerial liabilitiee(or Cu�ding exasa)over a period {eaaual paymoll of ective employees covered by the plan)wes S 7,I54,161 aud the tatio of the UAAL to
not to exceed 30 yeazs. The following table shows the componcats of the City's emwal OPEB cost of the cove�ed payroll was 20.�/..
the year,the amount actually cuntributai w the plan,md changee in ihe City'e net OPEB obligetion to
�p��, Actuariat valuetioos involve esstimmates of the value of repoRed amounts and assumplions about the
probebility of acurrence of eventa fsr into the firture. Examples include assumptions about future
�C S 177,816 employment,morteliry and t6e health care cost Uend Amo►mta determincd rogarding the ftmded status
[ntaest oa Net OPEB Obligaiion 17 443 of the plan and the ARC of the employer ate subject to continuat revieion as ectual results are compered
Adjustment W ARC (25,219)
with past expatatione and new estitnates ue made about the f4tare.
Annnal OPEB Cost(Expense) 170,040 1'he Scheduk of Fimding Pro�ees—Otha Post Employment Benefits,presented aa required
Conu3bution Made (27,020) supplemeatary informatioa fopowing the Notee to the Finenciai Statemenu,p:esenta multi-year trend
Inectase in Net OPEB Obligation 143,020 infom�ation about whether the ach�ial value of plan assete ie inereesing or docreasing ova time re]ative
Net OPEB Obli�ation-Begimm�g of Year 436,084 to tho actuerial eccruod liabilitiw for bene6ts.
Net OPEB ObGgation-End of Year $ 5?9��pq E. Actuarial Methode aad M��ptloas
Projectiona of benefiW for finencial re�artia8 Purposea ace basad on the substantive plam(the plan as
underatood by the employer and the plan membe[s)end include the typea of benefite provided at the Nme
of each valuation and the hiswrical pattem of shazing of bene5t costs bctwan the employer and plan
membeta to that poin� The actuarial methods and a�sumptions uead include techniqua that ere
deaigned W neduce d�e effccts of ahoR-tertn volacility in actuacial eecrued liabiliNea,consistert with the
long-tam paspective of tfie calculeUons.
CITY OF SHAKOPEE CITY OF SHAKOPF.E
NOTLS TO THE FIIYAIVCIAL STATEMENTS NOTES TO 7'HE FINANCIAL BTATEMENTS
Decerober 31,2010 December 31,2010
NOTE 1 b—POST EMPLOYMENT HEALTH BENEFI'f3 PLAN NOTE 18—FUND BALANCE DETAIL
E. Actuarlsl Method�ud Aaompdou(Contlnaed) Flmd equity balancae ve clasei5cd es follows to reflect the limitadoffi aad reatrictions of the respxtive
fu+lds.
In the January 1,2010 actuaria]valusaon,the projected unit credit actuarial cost method wes used. The
actuarial aasumptioas i�ludad a 4.0%discotmt rate,which ie baved on the iavcsdnent yield expoctcd w 2004A Ot6a
finence benefils depeoding on whethv the plan is flmded in a aepmte trust(about 7%to 8.5%.long- Gencral Improvemwt Govemmental
term,eimilar to a pension plan)or�mfiuided(3.5°h to 5°/a,ahorter•term,baved on City'e genaal eseda).
The Ciry cuaently doea not fund this benefit. At the actuarial vsluation date,the emnnal health caro coet �d �� Fands Total
haxl iate was calculetad to be 10°/.initially,raiuced inc►smentally to aa ultimate nte of 5%after 5 N��abltema S 149,940 S - 3 - S 149,940
yesre. The UAAL ia being uaortized as a level percentage of payroll. TLe remaining amortization �P
period at January 1,2010 wae 30 yeare. R����
BATCLitigation 2t8,032 - - 2t8,032
NOTE 17—SEGMENT IIYFORMATION Forfeituros - - 189,I 12 189,112
Transit - - 1,158,355 1,158,355
The City maintains four eatecpriso funde that acco�mt for tl►e elxtric,water,sawer and etorm drainage _ - 49,192 49,192
uiilities. The City coneidtrs each of its entcrprise funda w be a segmmt. Since the required segment Telecomminicat'toa
infoRnatian ie already included in the City'a proprietsry funda'Belance Shat and Staternrnt of S�p��t - 55,743 55,743
Revenuea,Expenses and Changes in Fimd Nd Asseb balaaces,thia infocmatioa has not been repeated in ��0��8�� - - 143,023 143,023
� the Notes to the Fineacisl StacemenW. Economic Devdopmeat : - 447,319 447,319
�$�� 476,417 4,651,280 5,127,697
O .
Capitallmprovem�ts - 2,203,238 2,203,238
Committed:
Woridng Capital 345,820 - - 345,820
Ttaasit - - 463,470 463,470
g�o���� . - 100,000 100,000
Economic Developmeat - - 20,930 20,930
park projecte • - 1,785,164 1,785,164
Capitallmprovementa • - 3,616,689 3,616,689
Zppg p�j� - - 190,431 190,431
Zppg pt,oj�� . - 14,876 14,876
2010 Rojecta - - 131,398 131,398
Fue Stalion 2 - - 2,47b,886 2,476,886
Unaesigned 8,323,938 (116,803) 8,207,135
Totel Fw�d Balance S 9,037,730 S 476,417 S 17,580,303 S 27,094,450
�� � � ��
NOTE 19—CHANGE IN ACCOUNTING PRINCIPLE
For the ycaz ended Dxember 31,2010,ihe City hes elected b implement GASB Statcmeat No.54,
Furrd Bolonce Repnrting and Cowanmenta!Fund Type Defmitiant. This action tesulted in a
reclessificaHon of fund balaacee oa the govecnmmlal fimd statements to coRespond with the ncw fund
naming suueture required by t}ue statement.
CITY OR SRAKOYEB
SCHEDULS OF N'UNDiNG PROGRESS-OTHER POST EMP'LOYMENT B6NEFITS
Deamber 31,2019
Actuari�l UAAL�s t
Actuarial Acctued L'ubility Uatimded Percmuge of
Acwari�t Value of (AAI.)- ML Funded Covercd Cwercd
Valuatiw Aeeelc EntryAge (UAAL) Ratio Payroll Payn�ll
Dsu , (a) (b) (b-a) (a/b) (c) ((b-aVc)
O1/Ol/08 S - S 1,887,961 S 1,881,961 0.0'/. S 6,652,669 28.4°/a
01/01/09" - 1,887,961 1,887,961 O.Mh 6,652,669 28.4%
O1101/10 - 1,483,810 I,483,810 0.0°/a 7,154,161 20.7%
• Becauae wn sctuarial velwtion is bcing perfamed onco every t}uee yats.t6e amouots tor
the 01/01/08 and 01lO1/09 v�luation an the asax.
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REQUIRED SUPPLEMENTARY INFORMATION
$4,865,000
City of Shakopee, Minnesota �
General Obligation Improvement Refunding Bonds, Series 201: �
Crossover Refunding of Series 2004A, 2004D
Refunding Summary
Dated 06/01/2012 � Delivered 06/14/2012
Series 2012 Ref Series 2012 Ref
2004A 2004D Issue Summary
Sources Of Funds
ParAmount of Bonds......................................................................... $1,135,000.00 $3,730,000.00 $4,865,000.00
Reoffering Premium........................................................................... 22,091.90 60,996.80 83,088.70
Accrued Interest from 06/01/2012 to 06/14/2012............................... 747.27 2,588.49 3,335.76
Total Sources................................................................................... $1,157,839.17 $3,793,585.29 $4,951,424.46
Uses Of Funds
Deposit to Crossover Escrow Fund.................................................... 1,140,259.43 3,741,301.27 4,881,560.70
Costs of Issuance.............................................................................. 12,967.73 42,616.40 55,584.13
Total Underwriter's Discount (0.198%).............................................. 2,241.73 7,367.10 9,608.83
Rounding Amount.............................................................................. 2,370.28 2,300.52 4,670.80
Total Uses......................................................................................... $1,157,839.17 $3,793,585.29 $4,951,424.46
Flow of Funds Detail
State and Local Government Series(SLGS) rates for........................ 5/15/2012 5/15/2012 5/15/2012
Date of OMP Candidates...................................................................
Primary Purpose Fund Solution Method............................................ Net Funded Net Funded Net Funded
Total Cost of Investments.................................................................. $1,140,259.43 $3,741,301.27 $4,881,560.70
Interest Earnings @ 0.296%.............................................................. 4,230.15 29,848.73 34,078.88
Total Draws........................................................................................ $1,144,489.58 $3,771,150.00 $4,915,639.58
PV Analysis Summary(Net to Net)
Net PV Cashflow Savings @ 1.729%(Bond Yield)............................ 111,172.81 276,713.57 387,886.38
Contingency or Rounding Amount..................................................... 2,370.28 2,300.52 4,670.80
Net Present Value Benefit.................................................................. $113,543.09 $279,014.09 $392,557.18
Net PV Benefit/ $4,690,000 Refunded Principal............................... 10.229% 7.794% 8.370%
Net PV Benefit/ $4,865,000 Refunding Principal.............................. 10.004% 7.480% 8.069%
Bond Statistics
Average Life....................................................................................... 6.886 Years 8.294 Years 7.966 Years
Average Coupon................................................................................ 1.9338794% 1.9832662% 1.9733058%
Net Interest Cost(NIC)...................................................................... 1.6799006% 1.8099147% 1.7836933%
Bond Yield for Arbitrage Purposes..................................................... 1.7288531% 1.7288531% 1.7288531%
True Interest Cost(TIC)..................................................................... 1.6477879°/a 1.7837301% 1.7560494%
All Inclusive Cost(AIC)...................................................................... 1.8240843% 1.9326798% 1.9105829%
,£rics2U12AReI2UU4A,2 � 5/15/2U12 � 3:40PN
�pringsted
City of Shakopee, Minnesota Prepared May 15, 2012
GO Improvement Refunding Bonds, Series 2012A By SPRINGSTED Incorporated
Moody's Rating: Aa2
Summary of Bidders Ranked by True Interest Cost
Rank Bidder TIC (°) NIC (o) NIC ($)
---- ------------------------------------- --------- --------- --------------
1. Morgan Keegan & Co., Inc. 1.755392% 1.7750320 $ 703,563.49
2. Robert W. Baird & Co. , Inc. 1.7671400 1.787716% $ 708,590.98
3. FTN Financial Capital Markets 1.7685800 1.7916120 $ 710,135.13
4. UMB Bank N.A. 1.7823020 1.785034o $ 707,528.00
5. Stifel, Nicolaus &Co., Inc. 1.7854280 1.8073040 $ 716,354 .88
6. Piper Jaffray 1.800029% 1.8187190 $ 720, 879.53
7. Vining-Sparks IBG, Limited Partnershi 1.8674240 1.8963770 $ 751, 660.78
8. Northland Securities, Inc. 1.8990820 1.9157720 $ 759,348.28
9. BOSC, Inc. 2.1042480 2.1281830 $ 843, 540.93
Purchaser (Based on TICo) : Morgan Keegan & Co. , Inc.
Price: $ 5, 034, 882.34
Premium (or Discount) : $ 74, 882.34
Coupons:
2/ 1/15 1.500
2/ 1/16 1.500
2/ 1/17 1.500
2/ 1/18 2.000
2/ 1/19 2.000
2/ 1/20 2.000
2/ 1/21 2.000
2/ 1/22 2.000
2/ 1/23 2.000
2/ 1/24 2.000
2/ 1/25 2.125
City of Shakopee Mail-SHAKOPEE(CITY OF)MN
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SHAKOPEE (CITY OF) MN
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MOODY'S EPI <epi@moodys.com> Mon, May 14, 2012 at 8:24 AM
To: jlinnihan@ci.shakopee.mn.us
MOODY'S ASSIGNS Aa2 RATING TO CITY OF SHAKOPEE'S (MN) $5 MILLION GENERAL
OBLIGATION IMPROVEMENT REFUNDING BONDS, SERIES 2012A
Aa2 RATING APPLIES TO $24.8 MILLION OF POST-SALE OUTSTANDING GOULT DEBT
SHAKOPEE (CITY OF) MN
Cities (including Towns, Villages and Townships)
Minnesota
Moody's Rating
Issue Rating
General Obligation Improvement Refunding Bonds, Series 2012A Aa2
Sale Amount $4,960,000
Expected Sale Date 05/24/12
Rating Description General Obligation
Moody's Outlook - NOO
NEW YORK, May 14, 2012 — Moody's In�estors Service has assigned a Aa2 rating
to the City of Shakopee's (MN) $5 million General Obligation Impro�nement
Refunding Bonds, Series 2012A. Concurrently, Moody's has affirmed the Aa2
rating on the city's outstanding general obligation unlimited tax debt.
Post-sale, the city will ha� $24.8 million of outstanding general obligation
debt.
SUMMARY RATINGS RATIONALE
The bonds are secured by the city's general obligation unlimited tax pledge.
Proceeds will current refund certain maturities of the city's outstanding
General Obligation Impro�ement Bonds, Series 2004A and General Obligation
Capital Impro�ment Plan Bonds, Series 2004D, for an estimated net present
value savings of$289,000. Assignment and affirmation of the Aa2 rating
reflects the city's moderately-sized tax base fawrably located within the
Twin Cities (Minneapolis-GO rated Aaa/stable outlook; St. Paul-GO rated:
Aa1/stable outlook) metropolitan area; healthy financial operations supported
by strong resen�es; and manageable debt burden with no future borrowing
planned.
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5/15/12 City of Shakopee Maii-SHAKOPEE(CITY OF)MN
STRENGTHS
-Strong socioeconomic profile
-Healthy financial operations supported by healthy reser� levels and a
formal fund balance policy
CHALLENGES
-Recent multi-year trend of declines in full valuation
-Unfawrable budgeted to actual variance for fiscal 2010
DETAILED CREDIT DISCUSSION
MODERATELY-SIZED TAXBASE FAVORABLY LOCATED IN TWIN CITIES METOPOLITAN AREA;
RECENT MULTI-YEAR TREND OF VALUATION DECLINES EXPECTED TO CONTINUE
The city's tax base will likely remain stable in the long-term as a result of
strong wealth leuels, sound operations among the city's largest employers and
the city's location within the Twin Cities metropolitan area. Following rapid
population and tax base increases earlier in the decade, with an estimated
64.6% population increase and o�er 100% tax base increase between 2000 and
2009, the city experienced declines in valuation in fiscal 2009, 2010, 2011
and 2012 of 3.3%, 4.5%, 5.1% and 6.2%, respecti�nely as residential property
values ha�+e softened. Officials are currently projecting additional declines
of approximately 5% in 2013. The city is the county seat of Scott County (GO
rated Aa1), offering a stabilizing presence for the community. Though the
city's tax base is largely residential (61.4% of 2012 valuation), the city's
tax base also benefits from the presence of a strong commercial sector, which
comprised a significant 36.5% of 2012 valuation.
The city's top ten taxpayers accounted for 9.1% of 2012 assessed valuation.
Officials report the city's largest employers and taxpayers are stable.
Operations at Seagate Technology, a computer hardware company and the city's
third largest taxpayer(1% of 2012 assessed Valuation) and second largest
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5.�j12 r City of Shakopee Mail-SHAKOPEE(CITY OF)MN
employer (1,595 employees) has stabilized. The company laid off 300 employees
at its Bloomington (GO rated Aaa) and Shakopee facilities. Officials report
the city is currently experiencing some new economic growth. San Mar, a
company that distributes clothing and other items, will begin constructing a
$35 million, 580,000 square foot warehouse in July 2012. The new facility is
expected to bring 300 new jobs to the city. Additionally, Trystar, a company
that manufactures portable and permanent power solutions, including cables
and power accessories, has announced plans to mov�e its corporate headquarters
from Faribault (GO rated Aa2)to Shakopee. The company is building a new
179,000 square foot warehouse expected to employ 80 people. The company plans
to begin construction in 2013, with plans to be operational by 2014.
Additionally, Imagine! Print Solutions, a printing company within the city,
is expanding its footprint within the city, adding 300,000 square feet to its
existing 500,000 square foot facility.
At 5.9% in February 2012, Shakopee's unemployment rate is lower than the
state and national rates of 6.6°/o and 8.7%, respectively, for the same period.
Resident income levels exceed national medians, with per capita income and
median family income le�els at 113.1% and 141.7% of national le�ls,
respectively, based on American Community Sun�ey 2006-2010 averages. The
village's full value per capita is strong at $90,733. The city's tax base
will likely remain stable going forward, despite a multi-year trend of marked
declines in valuation, as a result of its location within the Twin Cities
metropolitan area; strong socioeconomic profile and stable operations among
the city's largest employers and taxpayers. In the long-term, moderation of
valuation declines and o�,erall stability of�raluation trends within the city
could place upward pressure on the city's rating.
STABLE FINANCIAL OPERATIONS SUPPORTED BY SATISFACTORY RESERVES
The city's financial operations are expected to remain stable as a result of
management's consistent maintenance of satisfactory reserve le�els. The city
has a formal policy of maintaining 45% of General Fund expenditures in
reserve. The city ended fiscal 2010 with a total General Fund balance of$9
million, or a healthy 43.8% of General Fund rev�enues and a General Fund net
cash position of$8.8 million, or an equally healthy 42.8% of total General
Fund rev�enues. 2010 results reflect that General Fund expenditures exceeded
re�+enues by $308,000 as a result of transfers from the General Fund to the
city's debt service funds in anticipation of future debt service payments.
Additionally, officials drew down reserves to finance a new fire station and
parks projects with cash on hand. Property tax revenues represent the city's
largest operating re�renue stream, comprising 65.7% of fiscal 2010 General
Fund re�enues, followed by annual transfers into the General Fund from the
city's water and electric utilities at 10.8% and charges for services at
8.8%. Fawrably, the city receives only a �ry modest portion of its re�enues
from state sources (4% of total 2010 revenues) insulating the city from
potential wlatility of that revenue source.
Officials currently project the city will haue ended fiscal 2011 with a
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5/15/12 City of Shakopee Mail-SHAKOPEE(CITY OF)MN ,� �,
General Fund balance of$9.3 million, or 45% of total 2010 le�l General Fund
revenues. Fawrably, though the city originally budgeted for a sizeable 23%
increase in healthcare costs, actual results reflect a more moderate 12%
increase. In fiscal 2012, the city expects General Fund reser�s to increase
to $9.4 million as a result of savings realized from lower than budgeted snow
and ice removal resulting from the warmer than usual winter. The city has
also reduced its public works budget.
As the city has continued to maintain satisfactory resen�e le�ls in its
General Fund, operations ha�e remained healthy in its other funds. General
Fund liquidity has remained ample. The city's cash IeUels steadily increased
from $8.9 million, or 58.1% of total General Fund rev�enues in fiscal 2006 to
$11.2 million, or 57.8% in fiscal 2009, before decreasing to a still ample $8
million, or 42.8% of re�enues in fiscal 2010 as a result of the construction
of the new fire station and park projects. Officials expect to maintain cash
at 2010 le�els going fonnrard.
AFFORDABLE DEBT LEVELS; LIMITED FUTURE BORROWING PLANNED
Gi�en the city's below av�erage direct debt lev�el, a�rage principal
amortization and lack of future borrowing plans, the city's debt profile will
likely remain affordable. At 0.7% and 4.2% of full valuation, respecti�nely,
the city's direct debt burden is below a�erage and its overall debt burden is
above a�rage. In fiscal 2010, the city's debt service expenditures comprised
a moderate 18.2% of total operating expenditures. Principal amortization is
a�rage, with 68.6% of principal retired within ten years. Officials report
the city has no plans to issue additional debt at this time. All of the
city's outstanding debt is fixed rate and the city is not party to any
interest rate swap agreements.
WHAT COULD CHANGE THE RATING - UP
-Sustained stabilization of valuation trends re�rsing the multi-year trend
of significant valuation decline.
WHAT COULD CHANGE THE RATING - DOWN
-A continued and sustained decline in full valuation disproportionate to that
of other cities within the Twin Cities metropolitan area.
-Deterioration of the city's fund balances and/or liquidity
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°�!"/12 �- City of Shakopee Mail-SHAKOPEE(CITY OF)MN
KEY STATISTICS
Census 2010 population: 37,076 (80.3% increase since 2000)
2012 full market valuation: $3.4 billion (2.9% a�erage annual decrease since
2007)
Estimated full value per capita: $90,733
Unemployment rate (February 2012): 5.9% (MNI at 6.6%, US at 8.7%)
2010 Per Capita Income as a % of U.S.: 113.1%
2010 Median Family Income as a % of U.S.: 141.7°/a
FY 2010 General Fund balance (GAAP): $9 million (43.8% of total General Fund
re�nues)
FY 2010 General Fund net cash: $8.9 million (42.8% of total General Fund
revenues)
Debt burden: 4.2% (0.7% direct)
Principal amortization (10 Years): 68.6%
Post-Sale GOULT Debt: $24.8 million
PRINCIPAL METHODOLOGY USED
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5/15/12 City of Shakopee Mail-SHAKOPEE(CITY OF)MN � �
The principal methodology used in this rating was General Obligation Bonds
Issued by U.S. Local Go�rnments published in October 2009. Please see the
Credit Policy page on www.moodys.com for a copy of this methodology.
REGULATORY DISCLOSURES
The Global Scale Credit Ratings on this press release that are issued by one
of Moody's affiliates outside the EU are endorsed by Moody's In�estors
Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, in
accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on
Credit Rating Agencies. Further information on the EU endorsement status and
on the Moody's office that has issued a particular Credit Rating is available
on www.moodys.com.
For ratings issued on a program, series or category/class of debt, this
announcement provides rele�rant regulatory disclosures in relation to each
rating of a subsequently issued bond or note of the same series or
category/class of debt or pursuant to a program for which the ratings are
derived exclusively from existing ratings in accordance with Moody's rating
practices. For ratings issued on a support provider, this announcement
provides relevant regulatory disclosures in relation to the rating action on
the support provider and in relation to each particular rating action for
securities that deriwe their credit ratings from the support provider's
credit rating. For provisional ratings, this announcement provides relevant
regulatory disclosures in relation to the provisional rating assigned, and in
relation to a definiti�e rating that may be assigned subsequent to the final
issuance of the debt, in each case where the transaction structure and terms
have not changed prior to the assignment of the definiti�e rating in a manner
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Information sources used to prepare the rating are the following: parties
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�%"�2 -- City of Shakopee Mail-SHAKOPEE(CITY OF)MN
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5/15/12 City of Shakopee Mail-SHAKOPEE(CITY OF)MN -- �
CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. ("MIS")AND ITS
AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF
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Inde endent Auditor ' s Re ort
p p
• Unqualified Opinion on the Basic Financial
Statements
• Comprehensive Annual Financial Re ort
p
(CAFR) also reviewed for GFOA
Certificate of Achievement for Excellence
in F inanc i al Rep ortin
g
3
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Minnesota Le al Com liance
g p
• Compliance audit based on the Minnesota Legal
ComplianceAudit Guide fo� Local Gove�nments
.
covers seven areas o comp lance:
- -Deposits and Investments
- - Conflicts of Interest
- - Public Indebtedness
- - Contracting and Bidding
- - Claims and Disbursements
- - Miscellaneous Provisions
- - Tax Increment Financing
• No findings
4
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Report on Gove�nment Auditing Standa�ds
Findings :
• Lack of Segregation of Accounting Duties
• Improve Ice Arena Receipting Internal Controls
• Improve Community Center Receipting Internal
C o ntro 1 s
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General Fund
$24,000,000
�20,000,000
$16,000,000
�12,000,000
i
$8,000,000
�4,000,000
� 2007 2008 2009 2010 2011
■Revennes $15,266,076 $15,878,047 $17,074,639 �19,589,535 $20,956,396
■Expenditures 16,129,807 16,289,022 16,030,691 18,724,835 18,674,938
❑Fund Balance 9,707,533 9,859,602 11,502,280 9,037,730 9,304,194
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General Fund Revenues/Ezpenditures
Per Capita
$600
$556
$482 $484 $497 $505 $495
$500 $4'72
$456 ��
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General Fund Performance
Revenues:
Taxes and Assessinents $13,396,820 $ 14,300,921 $ 904,101
Licenses and Perniits 1,246,750 1,225,560 (21,190)
Intergovern�l�ental 737,560 796,076 58,516
Charges lor Seivices 3,547,010 3,879,113 332,103
Fines aud Forteihu-es 436,000 357,249 (78,751)
Miscellaneous Revenues 343,280 397,477 54,197
Total Kcvenues $ 19,707,420 $ 20,956,396 $ 1,248,976
Expcnditures:
General Government $ 3,254,700 $ 2,774,859 $ (479,841)
Ptiblic Sa[ety 9,715,730 9,401,915 (313,815)
Public Works 2,843,660 2,629,581 (214,079)
Pai-ks and Recreation 4,361,550 3,868,583 (492,967)
Total Expenditures $20,175,640 $ 18,674,938 $(1,500,702)
Transfei-s In $ 122,400 $ 122,400 $ -
Trausfei-s Out - (2,137,394) (2,137,394)
Net Transfei-s 122,400 (2,014,994) (2,137,394)
Change in I�und I3alance $ (345,820) $ 266,464 $ 612,284 g
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Unreserved/iTnassigned Fand Balance as a Percent of Ezpenditares
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General Fund Revenues
sza.000.000
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,
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2007 2003 2009 ZO10 2011
❑\Iiscellaneous S586,137 $�J3d.110 5-116.02� Sd18.6sd 5:97,�#77
❑Charges for Sen�ices 1,090.018 1.09�,250 30-1.�,6 3,023.330 �.879.113
■I=ines and Forfeitures -151.a18 ;66,618 ;6-t,39s �123.7d6 is7,2�49
�LicensesandPennits 973,658 691,415 1,122,619 1,�0�.90d 1225.560
■Interao��enuuental 590,4�8 �61.d12 59�.6�17 823.906 796.076
■Ta�esandAssessments 11.57d.-107 12.881,2d2 1�.772919 13.585.995 1�1.�00.921
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I5.000_000 — ;(�o
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2007 2005 2009 ?Ol0 2011
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�a,000,000 _ __ _
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$2,500,000
$2,000,000 -
$1,500,000 -
$1,000,000
$500,000
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2007 2008 2009 2010 2011
■Opeiating Revenues $2,773,051 �1�42,564 �3,444,044 $3,450,974 �2�36,144
■Opetating Eapenses 2,938,955 3,304,759 3,398,117 3,b83,168 3,836,202
❑Operating Inoome(Loss) {i�s,9oa} ��62,t9s� as�z� �2zz,i4a� �9oo,oss}
❑Chavge in NetAssets 3,884,672 bl 1,206 b03,882 I 301,459 {�524,858}
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■Service(��ges a1,266,358 a1,265,374 �1�20,566 $1,187,229 � �995,855
■Operating Expen.4es 1,352,078 1,435,376 + 1,264,261 j- 1,787,295 ; 1,411,271
❑Operativg Income(I,oss) (85,720} , (170,002) I 56�05 (600,066} �_ (415,416)
❑ChavgeinNetAssets 1,527,949 � 706,206 � 673,618 � 299,132 55,008
_ _--_ 14
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Bonded General Obligation Debt
$30,000,000 . . . .
_ __
$25,000,000 -- ____ �� ��
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$7,941,439
$20,000,000 $7,658,289 �
$7,504,770 '_ �,�:, ,.,,���
$5,127,697
$15,000,000
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$16,783,561
$10,000,000 $15,956,'711
$13,450,230 $13,582,303
$11,519,054
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2007 2008 2009 2010 2011
■Grosa Bo�«i Debt ❑Debt Service Fu�Balance ■Net Bonied Debt 1�
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Debt Service Schedule
{Five Year Increments)
$9,000,000
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� Total Expenditu�s Total Revenues TaJC Rcvenues
■Shakope� $505 $497 $366
■Savage 414 439 365
0 Chanhassen 406 425 318
❑Chaska 402 407 179 1�
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szso
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2010 Per Capita Information
Governmental Funds
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� Outstandmg Debt Toial Revenues* Tax Revenues* Capital Outlay
■Shakopee $505 �649 $384 �76
❑Savage 2,691 786 566 271
■Chanhassen 1,037 648 442 219
�Chaska 1,561 854 449 23g 2 0
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Questions`?
Kara Gaffy, CPA
320-229-6104
kgaffy@kdv.com
21