2025 Annual Comprehensive Financial Report

CITY OF SHAKOPEE

MANAGEMENT’S DISCUSSION AND ANALYSIS December 31, 2025

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l l Intergovernmental revenue came in over budget due to an increase in fire aid, police aid and public safety grants received during the year. Licenses and permits came in over budget on account of an influx of development and conservative budgeting. Actual revenues of $43,857,573 were $4,486,373 over budget. The significant variances are noted below: Charges for services came in over budget as a result of an increases in development resulting in increased engineering service fees. Additionally conduit debt fees were received in 2025. Investment income came in over budget, as a result of an increase in interest earnings and an unrealized gain from the market value of investments. l l l Intergovernmental revenues was increased $80,000 for MnDot Safe Road Zones Grant and $130,000 for the MN DNR shade tree grant program. Additionally charges for services increased $90,000 for the West End AUAR and $267,900 for engineering construction inspection services. The expenditure budget adjustments of $1,702,900 included increases in expenditures related to the revenue adjustments noted above and capital purchases of modular barriers, inspection vehicle, security cameras, irrigation upgrades and fire extinguisher training and training props. Culture and recreation were over budget due to leasing new fitness equipment for the community center. Utility costs came in under budget for the year. Public works was under budget as a result of staffing vacancies in the public works, less overtime in engineering. Salt and fuel related to less winter events than anticipated. Public safety came in over budget overall. Police came in over budget due to the additional liability recorded for future compensated absences with the new union contract settlement and pension expenses related to PERA as well as receiving a public safety partnership grant for wellness in police which was not budgeted for and increased training. Fire came in under budget due to unfilled positions during the year with staff turnover. General government came in under budget due to not spending all of the unallocated budget which is for special items that arise during the year as well as vacancies in the clerks office during the year. Actual expenditures of $40,456,440 were $295,760 under budget. The significant variances are noted below: l l l l l Taxes came in under budget as a result of tax petitions during the year.

CAPITAL ASSET AND DEBT ADMINISTRATION

Capital Assets

The City’s investment in capital assets for its governmental and business type activities as of December 31, 2025, amounts to $342,788,984 (net of accumulated depreciation and accumulated amortization). This investment in capital assets includes land, buildings and systems, improvement, machinery and equipment, park facilities, roads, highways and bridges, lease equipment and software.

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