2020 Comprehensive Annual Financial Report

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

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, 2020. The future minimum lease payments for these leases are as follows:

Year Ending Dec. 31

Amount

2021

$

10,185

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 Machinery and Equipment

$

79,100

(23,739) 55,361

Total

$

The future minimum lease obligation and the net present value of the minimum lease payments as of December 31, 2020 were as follows:

Governmental Activities

Year Ending Dec. 31 2021

$

5,535 5,535

Total Minimum Lease Payments Less: Amount Representing Interest Present Value of Minimum Lease Payments

(54)

$

5,481

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. G.O. bonds are direct obligations and pledge the full faith and credit of the City. These bonds generally are issued as serial bonds with equal debt service payments each year. G.O. bonds currently outstanding are shown on the following page.

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