2018 City of Shakopee Comprehensive Annual Financial Report

CITY OF SHAKOPEE MANAGEMENT’S DISCUSSION AND ANALYSIS December 31, 2018

Fund balance of the Capital Improvements fund decreased $168,998. Before transfers fund balance actually decreased $2,402,649 related to Vierling Drive project, street reconstruction projects and bituminous overlay. Additionally, funds were transferred related to the Vierling Drive project from the Economic Development Authority Special Revenue fund and the Tree Replacement Capital Project fund to reimburse for their portion of the project. Additionally, utility franchise payment and the designated tax levy dollars continued in 2018. Fund balance of TIF District No. 17 increased improvements to the County Road 83 $363,507. The first full year of tax increment financing was received in 2018. This TIF district was created to fund the Shenandoah Drive development project. This fund will be replenished with future tax increment. Fund balance of the Non-major Governmental Funds increased $2,010,304. Major changes are as follows:  Revolving Loan special revenue fund balance decreased $65,000 due to a grant being given to Anchor Glass in 2018.  Debt service fund balance decreased $401,354 due to regular bond payments offset by tax levies and assessment revenue related to the bonds.  Park Reserve fund balance increased $1,715,326. During 2018 development continued and park dedication funds were received for approximately $1.7 million. The City is completing a major park study so a hold was placed on park construction until the study can be completed.  TIF District No. 18 Canterbury Commons fund balance decreased $150,218. Planning began on this project in 2018 with construction beginning in 2019.  Community Center and Ice Arena Capital Improvement fund balance decreased $180,917. This project began in 2015 with design work only. In 2016 bond proceeds of approximately $28 million were received to fund this project. Much of the construction was completed in 2016 and 2017. Finishing items were completed in 2018.  Tree Replacement capital improvement fund balance decreased $72,993. A transfer was made related to its portion of the Vierling Drive project.  City Hall Capital Improvement fund balance increased $1,021,720. This project began in 2016 and is being funded internally. During 2017 approximately $6 million in construction was completed and the City Hall building was opened in August 2017. Transfers from the Building Internal Service fund were completed in 2017 and 2018 as part of the designated funding related to this project. A transfer of approximately $850,000 was made in 2018. This fund will be closed in 2019. Proprietary funds The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail.

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