2023 Annual Comprehensive Financial Report

CITY OF SHAKOPEE NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023

NOTE 8 – LONG-TERM DEBT (CONTINUED) C. Lease Payable (Continued)

D. SBITA Liability The fleet cameras were leased at the Police Department beginning 10/1/2023 for a term of 60 months at a fixed interest rate of 4.37%. The equipment will be returned at the end of the lease. The postage machines lease includes two machines, one at city hall and one at the police station beginning 12/1/2023 for a term of 63 months at a fixed interest rate of 4.92%. The lease can be renewed monthly at the end of the term but the City does not anticipate renewing for an additional term and the equipment will be returned. The body cameras were leased at the Police Department beginning 10/1/2023 for a term of 60 months at a fixed interest rate of 4.37%. The equipment will be returned at the end of the lease. $225,930 has been recorded by the City as intangible right-to-use software arrangements in the funds noted below as capital assets. Due to the implementation of GASB Statement No. 96, these arrangements for software noted below met the criteria of a SBITA; thus, requiring it to be recorded by the City as intangible assets and a SBITA liability. These assets will be amortized over the lease terms noted below since the software will be replaced at the end of the arrangement term and replaced with upgraded software. There are no residual value guarantees in the arrangement provisions. The term ends are noted below. The fitness equipment was leased at the Fire Department beginning 7/1/2022 for a term of 48 months at a fixed interest rate of 10.43%. The lease can be renewed for an additional 30 day renewal but the City does not anticipate renewing for an additional term and the equipment will be returned.

Total SBITA

Term End

Term End

Year

Fund Accounted

Description

Liability

Laserfiche

$

69,128 37,915

2 years 3 years 2 years 2 years 3 years

2026 2025 2025 2025 2026

IT IS Fund IT IS Fund

Finnly Clear ESRI Daxko

3,496 7,071 3,873

General Fund General Fund General Fund

$

121,483

The commission recorded SBITA assets of $622,787 as of December 31, 2023. The SBITA assets consist of an accounting and HR information system. Management is reasonably certain that the period covered by the SBITA arrangement will end in 2033. The future subscription payments under SBITA agreements totals $416,149.

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