2019 City of Shakopee Comprehensive Annual Financial Report

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

NOTE 7 – LEASES

A. Operating Leases The government leases office equipment under noncancelable operating leases. Total costs for such leases were $40,740 for the year ended December 31, 2019. The future minimum lease payments for these leases are as follows:

Year Ending Dec. 31

Amount

2020 2021

$

40,740 10,185 50,925

Total

$

B. Capital Leases The government has entered into a lease agreement as lessee for financing the community center weight equipment with a down payment of $1,845. This lease agreement qualifies as a capital lease for accounting purposes and, therefore have been recorded at the present value of its future minimum lease payment as of the inception date. The asset acquired through a capital lease is as follows:

Asset:

Less: Accumulated Depreciation Total Machinery and Equipment

$

79,100

(15,811) 63,289

$

The future minimum lease obligation and the net present value of the minimum lease payments as of December 31, 2019 were as follows:

Governmental Activities 22,140 $ 5,535 27,675 (1,059) 26,616 $

Year Ending Dec. 31 2020 2021 Total Minimum Lease Payments Less: Amount Representing Interest Present Value of Minimum Lease Payments

NOTE 8 – LONG-TERM DEBT

A. General Obligation Bonds The City issues general obligation (G.O.) bonds to provide for financing tax increment projects, street improvements and construction of government buildings. Debt service is covered respectively by tax increments and special assessments against benefited properties with any shortfalls being paid from general taxes. 69