2019 City of Shakopee Comprehensive Annual Financial Report

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

NOTE 9 – NON-EXCHANGE FINANCIAL GUARANTEE (CONTINUED)

The Agency issued its Governmental Development Refunding Bonds (City of Shakopee, Minnesota – General Obligation), Series 2013A (River City Centre Project), on December 26, 2013, in the original aggregate principal amount of $2,330,000 (the “Series 2013A Bonds”). The Series 2013A Bonds refunded the outstanding principal balance of the Series 2006A Bonds on February 1, 2014. The Series 2013A Bonds are secured the net revenues of the housing component of the Project and a pledge of the full faith and credit of the City. The Series 2013A Bonds are currently outstanding in the principal amount of $1,485,000 and mature on February 1, 2027. If housing lease revenues are insufficient to pay the principal of and interest on the Series 2013A Bonds, the City may be called upon to levy ad valorem taxes. The Agency issued its Governmental Tax Increment Development Refunding Bonds (City of Shakopee, Minnesota – General Obligation), Series 2013E (River City Centre Project), on December 26, 2013, in the original aggregate principal amount of $1,220,000 (the “Series 2013E Bonds”). The Series 2013E Bonds refunded the outstanding principal balance of the Series 2006E Bonds on February 1, 2014. The Series 2013E Bonds are secured by (i) the lease revenues generated by the retail component of the Project; (ii) a Tax Increment Pledge Agreement from the EDA to the City, assigned by the City to the Agency and by the Agency to the Trustee; and (iii) a pledge of the full faith and credit of the City pursuant to a guaranty made by the City in favor of the bond holders. The Series 2013E Bonds are currently outstanding in the principal amount of $810,000 and mature February 1, 2023. The City has committed to provide $39,276 in tax increment each year during the life of the Series 2013E Bonds. If retail lease revenues and tax increment are insufficient to pay the principal of and interest on the Series 2013E Bonds, the City may be called upon to levy ad valorem taxes. To date, no funds of the City (except tax increment) have been used to pay principal of or interest on the 2013 Bonds.

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