2019 City of Shakopee Comprehensive Annual Financial Report

CITY OF SHAKOPEE NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2019

NOTE 23 – CHANGE IN ACCOUNTING PRINCIPLE During fiscal year 2019, the City implemented a new accounting pronouncement issued by the Government Accounting Standards Board (GASB), Statement No. 84, Fiduciary Activities. This standard required a retroactive implementation which resulted in the restatement of beginning balances in the December 31, 2019 financial statements. Changes related to this standard are reflected in the financial statements and related disclosures. United States has caused business disruption through mandated and voluntary closings of many businesses. The City of Shakopee, itself temporarily closed facilities including City Hall, Community Center and Ice Arena. While the disruption is currently expected to be temporary, there is uncertainty around the financial impact it may have. TIF District No. 21 was established in 2018 as a soils condition district to facilitate development of certain property by removing or remediating hazardous substances, pollution or contaminants within the city. Under the agreement, the developer, Shakopee Crossings Limited Partnership, will be reimbursed up to $1,387,388 of soil remediation costs and will be reimbursed through tax increment collections over the next 20 years. The district was created in 2018 and was certified to the State of Minnesota in 2019. As of December 31, 2019, no tax increment had been generated. It is anticipated that the first tax increment will be generated in 2021. NOTE 21 – TAX INCREMENT FINANCING (CONTINUED) NOTE 22 – SUBSEQUENT EVENT In December 2019, a novel strain of coronavirus (COVID-19) surfaced. The COVID-19 outbreak in the

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