2023 Annual Comprehensive Financial Report

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

Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the City’s own programs. The basic fiduciary fund financial statements can be found on pages 48 to 49 of this report. Component Units Component units are legally separate organizations for which the City is financially accountable. The government-wide financial statements present information for the component units in a single column on the Statement of Net Position. Also, some information on the Statement of Changes in Net Position is aggregated for component units. The component units’ Statements of Net Position and Statement of Changes in Net Position provide detail for each major component unit. The complete financial statements can be obtained from Shakopee Public Utility. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The Notes to the Financial Statements can be found on pages 50 to 111 of this report. Other Information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City’s progress in funding its obligation to provide pension benefits to its employees. These can be found on pages 114 to 123 of this report. The combining statements referred to earlier in connection with nonmajor governmental funds and internal service funds are presented immediately following the required supplementary information on pensions. Combining and individual fund statements and schedules can be found on pages 132 to 147 of this report. GOVERNMENT-WIDE FINANCIAL ANALYSIS As noted earlier, net position may serve over time as a useful indicator of a City’s financial position. For the City, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $329.3 million at the close of the most recent year. By far the largest portion of the City’s net position $257.5 million (78.2 percent) reflects its investment in capital assets (e.g., land, buildings, infrastructure and equipment); less any related debt used to acquire those assets that is still outstanding. The City used these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

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