2021 Annual Comprehensive Financial Report

CITY OF SHAKOPEE

MANAGEMENT’S DISCUSSION AND ANALYSIS December 31, 2021

The TIF District No. 20 Enclave fund had a fund balance decrease of $136,528. A redevelopment grant of $50,000 was issued for public redevelopment costs for the property, which will be repaid from tax increment revenues. The fund also accrued interest on its interfund advance. 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

8,230 $

15,298 $

$

(433)

720

(1,062)

127

End of Year

8,950 $

14,236 $

$

(306)

  Actual revenues of $36,818,240 were $5,354,956 over budget. The variances are noted below: Licenses and permits came in over budget on account of an increase in development and building and conservative budgeting and an influx of development. Revenues were increased $2,341,184 primarily as a result of Federal American Rescue Act Plan funds. Expenditures were increased $1,473,522. The expenditure budget adjustments included a two percent cost of living adjustment, professional services related to master planning, and new positions added including a building inspector, graduate engineer, and communications specialist. Intergovernmental exceeded budget expectations as a result of Federal American Rescue Act Plan Funds. Charges for services came in over budget as a result of engineering fees related to development activities. 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. General government was under budget as a result of not spending contingency funds and due to parklets and signage projects being accounted for in the Local Projects fund. Transfers out exceeded budget, as a result of the City Council approved transfers to the Local Projects and Capital Improvements Fund. Budget amendments that net to an additional $867,662 of revenues between original and final amended budget were approved during 2021. 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. GENERAL FUND BUDGETARY HIGHLIGHTS       Actual expenditures of $30,562,766 were $782,856 under budget. The variances are noted below:

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