2025 Annual Comprehensive Financial Report

CITY OF SHAKOPEE

NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2025

NOTE 5 – RECEIVABLES/UNAVAILABLE REVENUE (CONTINUED)

B. Lease Receivable (Continued)

* The health care vendor operates its business within a 4,427 square foot unit. The city is paid $7,009 per month for twelve months increasing 2.6% per year until the end of the lease. The lease ends November 2029. The Commission, acting as lessor, leases water tower space for cellular services under long-term, non cancelable lease agreements. The leases expire at various dates through 2052. During the year ended December 31, 2025, the Commission recognized $135,813 and $54,859 in lease revenue and interest revenue, respectively, pursuant to these contracts. Certain leases provided for increases in future minimum annual rental payments of either 3 or 4 percent. Total commissions lease receivable at year end is $3,518,360. The Economic Development Authority (EDA) offers a commercial exterior improvement program which is used to encourage property owners to maintain and invest in their properties in order to promote economic growth. The program offers up to 50 percent of project costs for eligible improvements as a no-interest forgivable loan. Forgiveness of the loan takes place over a five-year period with 20 percent of the award forgiven annually. The city may extend or reduce the repayment period based on the dollar amount of the award. As of December 31, 2025, the balance of these loans is $180,397. There has been an allowance for doubtful accounts recorded for the same amount, as it is fully expected that these loans will be forgiven. C. Forgivable Loan

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