2019 City of Shakopee Comprehensive Annual Financial Report

CITY OF SHAKOPEE NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2019

NOTE 18 – COMMITTMENTS

The City has the following construction commitments at December 31, 2019.

Project Authorization

Work

12/31/2019 Commitment

Completed

NOTE 19 – RISK MANAGEMENT Reverend Pond Sculpture 2018 Sanitary Sewer Lateral Pipe Rehab 12th Avenue Reconstruction 2019 Lateral Pipe Rehab and CIPP Public Works Card Reader 2 Plow Trucks

115,000 556,828 2,869,489 607,338 5,032 266,364

103,500 459,690 2,698,175 557,246 1,510 -

11,500 97,138 171,314 50,092 3,522 266,364

Through the pool, the City is subject to reassessment but due to reserves and reinsurance contracts, the likelihood is very low. The policy limits through the pool included $2,000,000 aggregate for liability, $2,000,000 for automobile coverage, $1,000,000 faithful performance employee bonding and $2,000,000 for universal umbrella coverage. Property coverage is at approximately $103,000,000. There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three years. The City has entered into three Tax Abatement 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 abatement). The City purchases commercial insurance coverage through the League of Minnesota Cities Insurance Trust (LMCIT) with other cities in the state which is a public entity risk pool currently operating as a common risk management and insurance program. The City pays an annual premium to the LMCIT for its insurance coverage. The LMCIT is self-sustaining through member premiums and reinsures through commercial companies for excess claims. The City is covered through the pool for any claims incurred but unreported, however, retains risk for the deductible portion of its insurance policies. The amount of these deductibles ranges from $10,000 to $50,000 and is considered immaterial to the financial statements. NOTE 20 – TAX ABATEMENT AGREEMENT

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