2020 Comprehensive Annual Financial Report

CITY OF SHAKOPEE NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2020

NOTE 18 – COMMITTMENTS

The City has the following construction commitments at December 31, 2020.

Project Authorization

Work

12/31/2020 Commitment

Completed

2019 Lateral Pipe Rehab and CIPP 12th Ave Reconstruction 2020 Bituminous Overlay Unbridled Avenue Construction 2020 Lateral Pipe Rehabilitation

168,716 607,338 2,869,489 1,482,286 6,234,424 434,570 3,565,096 522,335

557,246 2,735,223 1,356,761 5,367,811

50,092 134,266 125,525 866,614 49,965 3,219,276 168,716 347,633

174,702 384,605 345,820 -

Ridge Creek Park and PLOC Improvement Pr SandVenture Pool Filtration System Park Planning (Various Projects)

NOTE 19 – RISK MANAGEMENT

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 has entered into four 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. NOTE 20 – TAX ABATEMENT AGREEMENT 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. 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 $111,000,000. 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.

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