2023 Annual Comprehensive Financial Report

CITY OF SHAKOPEE MANAGEMENT’S DISCUSSION AND ANALYSIS December 31, 2023

 The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close of the most recent year by $329.3 million (net position). Of this amount, $56.4 million (unrestricted net position) may be used to meet the City’s ongoing obligations to citizens and creditors, $15.4 million is restricted for specific purposes (restricted net position) and $257.5 million is the City’s net investment in capital assets. The City’s total net position increased $19.6 million. Before transfers, the net increase in governmental activities accounts for 70.1 percent of the total increase and business-type activities accounts for 29.9 percent of the increase.The City’s net investment in capital assets increased by $14.6 million, primarily a result of developer contributed infrastructure and infrastructure paid from capital grants. As of the close of the current year, the City’s governmental funds reported combined ending fund balances of $44.9 million, which is an increase of $1,132,000 from the prior year. Approximately 27.0 percent of this total amount, $12.1 million is available for spending at the City's discretion (unassigned fund balance). The City has assigned $14.2 million primarily for capital projects, restricted $15.4 million primarily for debt service and park development, and committed $2.7 million for building inspections. The remaining $516,392 is considered non-spendable fund balance. At the end of the current year, unassigned fund balance for the General Fund was$18.5 million, or 53.6 percent of total General Fund 2023 expenditures and 49.8 percent of the 2024 budgeted expenditures. The City’s total outstanding bonded debt decreased from $45.92 million to $43.96 million during the current year. The City retired $1.96 million in principal and did not issue any additional bonded debt. As management of the City of Shakopee (the “City”), we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the year ended December 31, 2023. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our Letter of Transmittal, which can be found on pages 3 to 9 of this report. Financial Highlights Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) Notes to the Financial Statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-Wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to private-sector business. The Statement of Net Position presents information on all of the City’s assets and deferred outflows of resources and liabilities and deferred inflows of resources, with the difference between them reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.    

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