2022 Annual Comprehensive Financial Report

CITY OF SHAKOPEE NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2022

NOTE 19 – TAX ABATEMENT AGREEMENT (CONTINUED)

During the year ended December 31, 2022, the City generated $2,515,698 in tax increment revenue. TIF District No. 10 was established in 1996 for the purpose of establishing multifamily rental housing. River City Centre is 52-units of multifamily rental housing owned and operated by the Scott County Community Development Authority (CDA). Under this agreement, up to $2,115,000 in development costs would be reimbursed over twenty-five years with the final year being 2024. During the year ended December 31, 2022, the City generated $43,579 of tax increment revenue and made payments of $39,221. The bonds issued to fund the development costs will be fully paid as of February 21, 2023, following that payment there will be no remaining obligations of the district. 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 increment). A "pay-as-you-go" is established for this amount, on which the City makes payments for a fixed period of time with available tax increment revenue after deducting for certain administrative costs. The City has entered into nine Tax Increment Financing (TIF) 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. KEB Abatement was established in 2019. KEB America, LLC is a leading manufacturer or automation products. The City of Shakopee awarded a nine-year economic development property tax abatement, ending in 2029, which required the creation of 98 full-time equivalent new jobs in Shakopee. The total City abatement awarded was $289,263. The first year of disbursement occurred in 2022. During the year ended December 31, 2022, the total disbursed was $28,280. Cherne Abatement was established in 2020. Cherne Industries Incorporated is a manufacturer of mechanical plugs, deflection gauges, testing equipment, tools and accessories for residential, commercial, and industrial piping systems. The City of Shakopee awarded a nine-year economic development property tax abatement, ending in 2031, which required the creation of 20 full-time equivalent new jobs in Shakopee and the relocation of 115 full-time equivalent jobs to Shakopee. The first year of disbursement will occur in 2023. The total City abatement awarded was $459,494. NOTE 20 – TAX INCREMENT FINANCING

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