2018 City of Shakopee Comprehensive Annual Financial Report

CITY OF SHAKOPEE NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018

NOTE 19 – TAX ABATEMENT AGREEMENT (CONTINUED)  Emerson Abatement was established in 2013. Rosemount Emerson Process Management is a leading supplier of process management products and solutions, including control valves, regulators, transmitters, analyzers, and automation systems. The City of Shakopee awarded a nine-year economic development property tax abatement, ending in 2023, which required the creation of 154 new full-time jobs in Shakopee. The first year of disbursement occurred in 2016. The total City abatement awarded was $590,496. The total county abatement awarded was $570,608 with an annual maximum award of $64,401. During the year ended December 31, 2018, the total disbursed was $139,253 with $64,401 from Scott County and $74,852 from the City.  Shutterfly Abatement was established in 2014. Shutterfly, Inc. is an Internet-based social expression and personal publishing service that was founded in December of 1999. The City of Shakopee awarded a nine-year economic development property tax abatement, ending in 2024, which required the creation of 258 new jobs in Shakopee. The first year of disbursement occurred in 2017. The total City abatement awarded was $758,771 with an annual maximum award of $89,431. The total county abatement awarded was $734,898 with an annual maximum award of $86,615. During the year ended December 31, 2018, the total disbursed was $121,626 with $59,049 from Scott County and $62,577 from the City. NOTE 20 – TAX INCREMENT FINANCING The City has entered into five Tax Increment Financing agreements which meet the criteria for disclosure under Governmental Accounting Standards Board Statement No. 77 Tax Abatement Disclosures. The City's authority to enter into these agreements comes from Minnesota Statute 469. The City entered into these agreements for the purpose of economic development. Under each agreement, the City and developer agree on an amount of development costs to be reimbursed to the developer by the City though tax revenues from the additional taxable value of the property generated by the development (tax increment). A "pay-as-you-go" is established for this amount, on which the City makes payments for a fixed period of time with available tax increment revenue after deducting for certain administrative costs. During the year ended December 31, 2017, the City generated $1,657,231 in tax increment revenue and made $1,192,203 in payments to developers.

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