2022 Annual Comprehensive Financial Report

CITY OF SHAKOPEE

MANAGEMENT’S DISCUSSION AND ANALYSIS December 31, 2022

The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Unrestricted net position of the enterprise funds (expressed in thousands): Proprietary funds

Storm

Drainage

Sewer

Refuse

Beginning of Year Change During Year

$ 8,950

$ 14,236

$

(306)

(4,379)

(516)

95

End of Year

$ 4,571

$ 13,720

$

(211)

  Revenues were increased for additional building permit revenue. The expenditure budget adjustments included part-time wage adjustments, purchase of rental housing and code enforcement software, utility cost increases, motor fuel cost increases, and credit card processing fees related to additional building permit revenues. Budget amendments totaling an additional $163,660 of revenues and $494,060 of expenditures between original and final amended budget were approved during 2022. Following are the main components of the amendments: The City has undertaken several new development projects and recently completed a study to ensure fees charged are covering operations of the funds. A portion of these projects are funded through special assessments, but a significant portion of this is funded through the anticipated future revenues collected for services. The Refuse fund was created during 2014 with the City’s purchase of garbage carts. The negative net position is anticipated to be reduced each year as an agreement is in place with the refuse hauler to repay the cost of carts over the next few years. During 2022 the carts were no longer owned by the city as part of the updated garbage contract which took place as of January 1, 2022. The City still continues to recieve a cart fee payment as part of the agreement to help pay down the interfund loan on the original purchase. GENERAL FUND BUDGETARY HIGHLIGHTS Intergovernmental revenue came in over budget due to an increase in municipal maintenace, PERA on behalf payments related to pension liability and fire aid in 2023. Licenses and permits came in over budget on account of an influx of development and conservative budgeting. Charges for services came in over budget as a result of an increases in the contribution from Shakopee Public Utilities. Investment income came in under budget, as a result of a unrealized loss from the market value of investments being impacted from rising interest rates. Actual revenues of $34,835,636 were $3,021,176 over budget. The variances are noted below:    

Actual expenditures of $32,803,463 were $8,603 over budget. The variances are noted below: Public safety was under budget primarily as a result of vacancies in the police department.

  

Culture and Recreation was over budget as a result of rising utility costs, captial lease of new equipment and increased cleaning contracts and building maintenance and pool supplies for both sand venture and the indoor pool. Public works was under budget as a result of staffing vacancies in the engineering department.

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