5.0 - Finance

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5.1 – Fiscal Policy

Standard:
Fiscal policies setting guidelines for management and control of revenues, expenditures, and investment of funds shall be set forth clearly in writing, and the legal authority must be clearly established.

Narrative:
The City of Shakopee maintains clear, written fiscal policies that establish guidelines for management and control of revenues, expenditures, and investment of funds. These policies are rooted in state statute, municipal code, and internal policy documents, which together form the legal authority for fiscal management.

Specifically, Minnesota Statute 412.701 outlines how the City’s budget is presented to the City Council, requiring detailed breakdowns by department, revenue sources, expenditures (including wages and salaries separately), debt service, and capital outlays. Minnesota Statute 275.07 determines when the City’s levy must be set and reported to the Commissioner of Revenue. Locally, Chapter 34 of the Shakopee Municipal Code governs Finance and Revenue, while the City’s Purchasing Policy provides clear internal procedures for procurement, contract management, and expenditure oversight.

The City of Shakopee operates on a fiscal year beginning January 1 and ending December 31. The budget development process follows a structured annual timeline designed to ensure transparency, public input, and Council oversight:

Spring-Early Summer: Staff prepare the Capital Improvement Plan, complete budget forecasts, and host public budget listening sessions.

Summer: City Council reviews the proposed Capital Improvement Plan, budget, and preliminary tax levy.

September: City Council adopts the maximum preliminary levy and approves the five-year Capital Improvement Plan.

Fall: Departments submit detailed budget requests to the City Administrator.

November: The City Administrator submits the proposed budget to the City Council for workshop discussion.

December: City Council hosts a public budget meeting, approves the final budget, and certifies the tax levy.

Together, these statutes, codes, policies, and processes provide a clear legal foundation and structured approach for the City’s fiscal management, ensuring that revenues, expenditures, and investments are responsibly managed and publicly accountable.

5.1.1 Comprehensive Revenue Policy

Standard:
There shall be an established revenue policy that is periodically updated regarding fees and charges for services and the strategies and methodologies for determining fees and charges and levels of cost recovery.

Narrative:
The City of Shakopee Parks and Recreation Department maintains an established revenue policy that outlines the framework for setting fees and charges, as well as the strategies used to determine cost recovery levels. This policy, developed by staff and loosely based on the GreenPlay LLC Cost Recovery Pyramid Model, ensures consistency, transparency, and long-term financial sustainability. The Comprehensive Revenue Policy was adopted by Shakopee City Council in August 2025.

The Comprehensive Revenue Policy defines the purpose of revenue management as supporting service delivery through a balance of cost recovery and community accessibility. Programs and facilities are evaluated based on the degree of community versus individual benefit, and fees are established accordingly. This approach recognizes that some services are primarily public goods that should remain accessible at low or no cost, while others that provide a greater individual benefit may recover a higher percentage of costs through user fees.

The Parks and Recreation Department’s fees and charges are reviewed annually by staff and presented to the City Council for approval in the fee schedule. This process ensures that fees remain current, reflect market conditions, and support the Department’s overall budget objectives.

5.1.2 Agency Acceptance of Gifts and Donations

Standard:
The agency shall have an established policy for the acceptance of gifts and donations.

Narrative:
The City of Shakopee has an established policy governing the acceptance of gifts and donations to ensure transparency, accountability, and alignment with the City’s mission and values. This policy is guided by Section F of the City’s Purchasing Policy and Minnesota Statute §471.895, which prohibits local officials from requesting, soliciting, or accepting gifts from any person or organization with a direct financial interest in City decisions. In addition, the Shakopee Personnel Handbook provides detailed guidance to staff on appropriate behavior regarding gift acceptance.

The City’s process for donations is further outlined in Resolution 5794, which establishes parameters to ensure donations support the City’s mission, vision, and strategic goals. Under this resolution, the City Council must approve cash donations of $1,000 or more and non-cash donations valued at $500 or more. Donations below these thresholds may be accepted directly by department heads or supervisors, providing flexibility while maintaining oversight.

This tiered approach ensures that all gifts and donations are properly reviewed and recorded, while larger contributions receive formal City Council approval. By combining state law, internal policy, and Council resolution, the City of Shakopee has a clear and comprehensive framework for managing gifts and donations in a responsible and ethical manner.

5.1.3 Grants Procedures

Standard:
Where feasible and appropriate, the agency shall procure regional, state, federal and/or other applicable agency grants to supplement funding through an established procedure to research, coordinate and implement grant opportunities. Prior to grant procurement, agencies shall evaluate how application, approval, implementation, and management processes will be coordinated.

Narrative:
The City of Shakopee Parks and Recreation Department follows a structured procedure to identify, apply for, and manage grants from regional, state, federal, and other applicable funding sources. The City has a dedicated Grants & Special Projects Coordinator responsible for overseeing all aspects of grant procurement and administration.

Quarterly grant meetings are held with departmental staff to review current and upcoming grant opportunities, discuss funding priorities and project ideas, and provide updates on active and completed grants. The Grants Coordinator researches potential funding sources, evaluates alignment with departmental goals, and brings prospective grants to departments for review before pursuing applications. Applications are prepared in coordination with operational staff and require City Council approval prior to submission.

Upon award, the Grants Coordinator seeks City Council approval to formally accept funding, manages all administrative requirements, including compliance, reporting, and document management, and coordinates with the City Administrator to review and sign award agreements. Operational staff implement grant projects, including purchasing, training, or other requirements.

Grant tracking is maintained through a centralized system that records applications, awards, reporting deadlines, audit periods, and relevant grant-specific information. Each grant also has an individual folder in the City’s shared drive to ensure accessibility and continuity of records. Financial expenditure for grants is tracked separately using subledgers or project codes to prevent co-mingling of funds. Ongoing monitoring by the Grants Coordinator ensures accountability, timely reporting, and project completion. Quarterly meetings additionally serve as checkpoints for departments to review progress, share lessons learned, and plan future grant initiatives.

5.1.4 Private, Corporate, and Non-Profit Support Procedures

Standard:
Where feasible and appropriate, the agency shall solicit private, corporate, and nonprofit support to supplement agency funding through an established procedure to research, coordinate and implement alternative funding options. Prior to acceptance of support the agency shall evaluate the terms of acceptance and how the implementation and management process will be coordinated.

Narrative:
The City of Shakopee actively seeks private, corporate, and nonprofit support for initiatives, programs, and events that align with the City’s vision, mission, and purpose. These partnerships help enhance community offerings while ensuring fiscal responsibility and sustainability.

Sponsorship and donations are pursued for programs that fall within Tier 1 and Tier 2 of the Parks and Recreation Cost Recovery Model - those that provide broad community benefit and are offered at no or low cost to participants. These include large-scale community events, recreation programs, and/or initiatives targeting underserved populations where the cost barrier to participate needs to remain low.

Grants are pursued through a coordinated process led by the City’s Grants & Special Projects Coordinator, who identifies funding opportunities, collaborates with departmental staff to develop competitive applications, and manages all administrative, compliance, and reporting requirements once funding is awarded. Quarterly grant meetings ensure alignment with departmental goals, provide progress updates, and support accountability throughout each project’s lifecycle.

Financial and in-kind support from private and nonprofit partners has been instrumental in maintaining accessible, high-quality programs while preserving key elements such as entertainment, amenities, and participant engagement. This approach allows the City to continue delivering meaningful recreational and cultural experiences without increasing barriers to participation.

5.2 Fiscal Management Policy

Standard:
There shall be established procedures for the fiscal management of the agency.

Narrative:
The City of Shakopee maintains well-defined procedures for fiscal management to ensure the responsible stewardship of public resources. These procedures are guided by several key policies and planning tools:

Purchasing Policy: The City’s Purchasing Policy establishes clear guidelines and legal requirements for the procurement of goods and services. It ensures accountability, transparency, and compliance with state statutes while providing staff with a structured process for obtaining the best balance of quality, price, and service in purchasing decisions

Operating Budget Policies: The City has adopted comprehensive Operating Budget Policies that require a balanced budget, define the use of revenues and fund balances, set expectations for revenue forecasting, and establish monitoring procedures. These policies ensure that expenditures align with long-term objectives, provide for the maintenance of city assets, and protect against unforeseen events. They also outline accounting, auditing, and financial reporting practices in accordance with GAAP, GASB, and state law

Capital Improvement Program (CIP 2025–2029): The City manages long-term capital planning through a rolling four-year CIP, which schedules capital projects and funding needs. This program ensures that capital investments are strategically prioritized, fiscally responsible, and aligned with community goals.

Together, these fiscal management procedures provide a framework that balances day-to-day operational needs with long-term financial sustainability. They safeguard public trust, support organizational accountability, and provide transparency for both staff and community stakeholders.

5.2.1 Authority and Responsibility for Fiscal Management

Standard:
The agency's chief administrator shall be designated as having the authority and responsibility for the fiscal management of the agency. Although an agency's chief administrator is ultimately responsible for all agency fiscal matters, the size and complexity of the agency may dictate the need to delegate responsibility for fiscal management functions to an identifiable person or component within the agency.

Narrative:
Within the City of Shakopee, fiscal management authority is outlined in Section H: Authorization of the City’s Purchasing Policy. The City Administrator and Department Directors are responsible for ensuring that all city projects and operations remain within the adopted budget.

For the Parks and Recreation Department, the Parks and Recreation Director serves as the chief administrator with authority and responsibility for the fiscal management of the department. The Director ensures that departmental operations, programs, and capital projects are managed within approved budget allocations and in compliance with city fiscal policies.

While the City Administrator maintains overall fiscal authority citywide, the Parks and Recreation Director provides direct oversight and accountability for the department’s budget and fiscal procedures. Limited purchasing authority may be delegated to designated staff within the department to support operational efficiency; however, ultimate responsibility for fiscal management remains with the Director.

This structure ensures that the Parks and Recreation Department’s fiscal matters are managed responsibly, with clear accountability to both City administration and the City Council.

Suggested Evidence:
5.2.1a Purchasing Policy, Section H

5.2.2 Purchasing Procedures

Standard:
Agencies shall have established procedures for the requisition and purchase of agency equipment, supplies, and services.

Narrative:

The City of Shakopee’s Purchasing Policy Section H and Section I (pages 3-9) provides established procedures to guide the requisition and purchase of equipment, supplies, and services. These procedures outline purchasing thresholds, bidding requirements, and vendor selection criteria to ensure compliance with state law and promote fair and open competition.

Purchasing authority is tiered by dollar amount, ranging from department-level discretion for small purchases to City Council approval and sealed bids for larger projects. Vendor selection is based on cost, quality, and service, with safeguards to prevent conflicts of interest. Petty cash, procurement cards, and invoice payment procedures are managed under finance department oversight and comply with state statutes.

To assist staff, the City provides a purchasing flow chart that outlines the levels of purchasing authority across supervisory roles. This ensures clarity, consistency, and accountability in all purchasing decisions.

These procedures collectively ensure that all requisitions and purchases within the Parks and Recreation Department are handled responsibly, transparently, and in alignment with city policy and fiscal management standards

Suggested Evidence:
5.2.2a Purchasing Policy
5.2.2b Purchasing Flow Chart

5.2.2.1 Emergency Purchase Procedures

Standard:
There shall be established procedures for emergency purchases within the agency to secure equipment or services in a swift and efficient manner.

Narrative:
The City of Shakopee has established procedures for emergency purchases through Section I.5 of the Purchasing Policy and under Shakopee City Code Chapter 33. Emergency purchases are permitted when sudden, unexpected circumstances arise that require immediate action to protect the health, safety, or welfare of the community.

In such situations, as noted by Shakopee City Code Section 33.12, when it is impossible or impractical to seek prior City Council approval, the Mayor or the Mayor’s designee is authorized to use City equipment, supplies, personnel, and funds as necessary to maintain operations and ensure public safety. This authority ensures that essential equipment, supplies, or services can be obtained swiftly while still maintaining compliance with statutory requirements.

These emergency purchasing procedures provide the Parks and Recreation Department with the flexibility to respond quickly in urgent situations while preserving accountability and oversight.

Suggested Evidence:
5.2.2.1 Purchasing Policy Section I.5

5.3 Accounting System

Standard:
The agency shall have a comprehensive accounting system to ensure an orderly, accurate, and complete documentation of the flow of funds. The accounting system shall facilitate rapid retrieval of information on the status of appropriations, expenditures, and revenue any time the information is required.

Narrative:
The City of Shakopee maintains a comprehensive accounting system designed to ensure orderly, accurate, and complete documentation of all financial transactions. The system utilizes JD Edwards, Hubble, and Tungsten software to manage and report financial data. JD Edwards serves as the primary enterprise resource planning (ERP) system, tracking expenditures, revenues, and appropriations. Hubble provides advanced financial reporting and analytics, allowing staff to quickly generate detailed reports on the flow of funds. Tungsten is used for document management and streamlining procurement-related financial processes.

Together, these tools enable rapid retrieval of information, accurate tracking of financial activity, and support effective fiscal management across the agency.

5.3.1 Financial Status Report

Standard: The agency shall periodically, monthly at a minimum, provide financial status reports. Each appropriation and expenditure shall be classified according to function, organizational component, activity, object, and program.

Narrative:
The City of Shakopee Finance Director provides monthly financial status reports to the City Council, including recreation expenditures. This review occurs during open sessions of the City Council and encompasses initial appropriations for each account, balances at the commencement of the month, expenditures and encumbrances made during the period, unencumbered balances, and revenue status. In addition, the Finance Director provides a quarterly in-depth review of all investments and how they impact operations.

5.3.2 Position Authorization Procedures

Standard:
The agency shall have established procedures for maintaining control over the number and type of authorized filled and vacant positions to ensure that persons on the payroll are legally employed and that positions are in accordance with budget authorizations.

Narrative:
The City of Shakopee maintains control over authorized positions through its annual budget report, where staffing levels (current and prior two years) are published for council and residents. Staffing changes are specifically identified during the budget process with preliminary requests due in May and final requests submitted by the end of June for the following year.

Suggested Evidence:
5.3.2a 2025 Shakopee Staff List
5.3.2b 2025 Budget Timeline

5.3.3 Fiscal Control and Monitoring Procedures

Standard:
The agency shall have established procedures used for collecting, safeguarding, and disbursing funds. The procedures shall enhance security and accountability of all monies received by the agency.

Narrative:
The City of Shakopee has established comprehensive procedures for collecting, safeguarding, and disbursing funds that ensure both security and accountability. These procedures are guided by the City’s Operating Budget Policy, which requires balanced budgets, ongoing monitoring of revenues and expenditures, and monthly financial reporting. The Accounting, Auditing, and Financial Reporting Policy provides additional oversight by mandating compliance with Generally Accepted Accounting Principles (GAAP) and Governmental Accounting Standards Board (GASB) standards, requiring the preparation of financial statements, and conducting annual independent audits, with results published in the City’s Annual Comprehensive Financial Report.

The City’s Purchasing Policy further defines the procedures for authorizing expenditures, identifying who may accept and disburse funds, and ensuring purchases comply with state law, competitive bidding requirements, and public purpose standards. This policy establishes purchasing authority thresholds for staff, department directors, the City Administrator, and City Council, while also addressing special cases such as cooperative purchasing, emergency expenditures, and professional services contracts. In addition, statutory requirements for payment timelines, withholding certificates, and documentation retention safeguard the disbursement process.

Together, these policies provide the framework for fiscal control and monitoring, ensuring that all payments are properly collected, safeguarded, allocated, and disbursed in accordance with budget authorizations and state statutes.

5.3.4 Independent Audit

Standard:
There shall be an independent audit of the agency's fiscal activities conducted annually or at a time stipulated by applicable statute or regulation. The audit may be performed by the government's internal audit staff (external to the agency being audited) or by an outside certified public accounting firm.

Narrative:
The City of Shakopee ensures accountability and transparency of its fiscal activities through the completion of an annual independent audit. In accordance with best practices and applicable standards, the City contracts with an external certified public accounting firm to conduct the Annual Comprehensive Financial Report (ACFR).

For the 2024 fiscal year, the firm Abdo was engaged to complete the ACFR, provide the executive governance summary, and present all findings to the City Council. The audit resulted in a clean opinion, indicating that the City’s financial statements are presented fairly in all material respects and conform to generally accepted accounting principles. This outcome affirms the City’s sound financial management practices and its commitment to fiscal integrity.

Suggested Evidence:
5.3.4a 2024 ACFR Independent Audit

5.4 – Annual or Biennial Budget

Standard:
There shall be an annual or biennial operating and capital improvements budgets, including both revenues and expenditures. Operating budgets include both capital and operating expenses, cover a one-year or two-year period and capital improvements may extend five or six years with annual review. The nature of an agency's budgetary system may be determined by the kind of system in use by its governmental authority.

Narrative:
The City of Shakopee prepares an annual operating budget that includes both operating and capital expenses. The Parks and Recreation Department represents approximately 14% of the City’s General Fund expenditures. In addition, the City maintains a five-year Capital Improvements Program (CIP) to plan, acquire, construct, and maintain public facilities for the community as established by City Code Section 34.05. The CIP is developed with careful consideration of available resources and fiscal constraints, ensuring that essential public services continue uninterrupted while supporting the City’s broader economic development goals. Both the operating budget and the CIP are reviewed by staff annually and approved by City Council.

5.4.1 Budget Development Guidelines

Standard:
The agency shall establish guidelines to inform the heads of organizational components of the essential tasks and procedures relating to the budget preparation process. The guidelines shall include instructions for preparing budget request documents and for providing adequate justification for major continuing expenditures or changes in continuing expenditures of budget items. Information should be included regarding operating impact.

Narrative:
In accordance with Shakopee Municipal Code 34.15, the City Administrator is granted the authority to create and present the annual budget to the City Council. The Finance Director coordinates the budget preparation process and develops a comprehensive budget calendar each year to outline key milestones, submission deadlines, and review dates. This calendar is distributed to all department directors to guide their work through each stage of the process.

At the start of the budget cycle, the Finance Director issues budget kickoff communications to department heads, providing clear instructions for preparing budget requests and outlining requirements for supporting documentation and justifications. Departments are expected to include rationale for all major or continuing expenditures, as well as to identify the operational impact of any proposed changes.

Throughout the process, the Parks and Recreation Director and Finance Director conduct detailed operational budget reviews to ensure accuracy and alignment with city priorities. Any proposed increases in operating expenditure exceeding $10,000 or any new staffing requests require submission of a budget proposal to the Finance Director and City Administrator for evaluation and approval.

The budget development process includes multiple departmental review meetings, public input sessions, and City Council work sessions to discuss priorities and adjustments. Following these reviews, proposed tax notices are distributed to property owners, and the City Council subsequently adopts the final tax levy, which is then certified with the county and state to complete the budget process.

5.4.2 Budget Recommendations

Standard:
Major organizational components shall provide recommendations, based on operational and activity analysis, for use in the development of the agency's budget.

Narrative:
As part of the City of Shakopee’s annual budget development process, each major organizational component provides recommendations based on operational and activity analysis to inform the agency’s overall budget. The preliminary budget is first distributed to the Parks and Recreation Director, who collaborates with recreation department managers to review current and projected needs. During this review, managers assess staffing levels, operating expenses, and expected revenue, and document proposed changes directly on the preliminary budget. Notes from the previous year’s budget are also reviewed to ensure consistency.

Operational staff also utilize an excel tool called the "Parks and Recreation Program Tracker" to evaluate each program’s financial impact on the budget, to include supply expenses, staff allocation, revenue, and cost recovery targets. This tool helps determine financial impact of each program element.

Following this internal review, the Parks and Recreation Director meets with the Finance Director to evaluate the proposed adjustments and discuss departmental priorities. Any budget proposals exceeding $10,000 are formally submitted for review and approval by the Finance Director and City Administrator.

In addition, the Capital Improvement Plan (CIP) is reviewed to verify that project funding levels remain sufficient. Project bids are secured, when possible, to confirm cost accuracy and to support the prioritization of planned improvements. This collaborative and data-informed approach ensures that personnel needs, program costs, and line items are carefully analyzed and incorporated into the final recommended budget.

5.5 – Budget Control Procedures

Standard:
The agency shall have procedures for budget control with periodic reporting of revenues and expenditures, and continuous management review.

Narrative:
The City of Shakopee Parks and Recreation department has established procedures for budget control that ensure continuous monitoring, review, and management of revenues and expenditures. These procedures include:

Monthly Department Reports: Each department receives a report through the Hubble system detailing year-to-date actuals, monthly actuals, and comparisons to both the monthly and annual budget, allowing staff to track financial performance and address variances promptly.

Monthly Council Reports: A summary report is provided to City Council, including both operating expenditure and Capital Improvements Program (CIP) expenditures, ensuring transparency and oversight of the City’s financial activities.

Quarterly Budget Review: The Park and Recreation leadership team conducts a quarterly review of departmental and program budgets to evaluate progress toward financial goals, identify potential concerns, and plan for future spending, supporting informed decision-making and effective resource management.

These measures collectively provide a structured approach to budget control, aligning daily financial management with strategic priorities and maintaining accountability throughout the agency.

5.5.1 Supplemental/Emergency Appropriations Procedures

Standard:
The agency shall have established procedures for requesting supplemental or emergency appropriations and fund transfers to meet circumstances that cannot be anticipated by prior fiscal planning efforts. Mechanisms of adjustment may include transferring funds from one account to another and/or requesting that additional funds be granted for agency needs.

Narrative
The Shakopee Parks and Recreation Department follows established procedures for requesting supplemental or emergency appropriations and for transferring funds to address circumstances that cannot be anticipated through prior fiscal planning. These procedures are guided by the City’s Operating Budget Policy #7, which stipulates that budgets are legally adopted at the division level for both the General Fund and the Economic Development Authority (EDA). Staff are authorized to shift budgeted amounts within divisions to meet operational needs, but any adjustments that change division or fund totals require formal action by the City Council.

When unforeseen expenditures arise, the department coordinates with Finance staff to prepare a budget amendment proposal for Council consideration. This process includes documenting the reason for the supplemental appropriation or fund transfer, identifying affected accounts, and providing a clear summary of financial impacts. For example, the 2024 budget amendments included adjustments such as recognizing additional grant revenue for the National Historic Registry project, updating State Fire Aid allocations, accounting for grant-funded staffing in the Building Inspection Department, and reallocating building maintenance costs across departmental budgets. These amendments are presented to the City Council in a single, transparent action item, providing clarity and maintaining fiscal accountability.

5.5.2 Inventory and Fixed Assets Controls

Standard:
The agency shall have established procedures for inventory control of property, equipment, and other assets to prevent losses and unauthorized use, and to avoid both inventory excesses and shortages. There shall be a complete and current listing of agency assets.

Narrative:
The Shakopee Parks and Recreation Department maintains established procedures for inventory and fixed asset control to ensure accountability, prevent loss or unauthorized use, and avoid both excesses and shortages. All assets are tracked in accordance with the City of Shakopee’s Capitalizable Assets Policy, which provides guidance on identifying, valuing, and depreciating capital assets.

Assets meeting the City’s capitalization threshold (per-unit value of $25,000 or greater for machinery and equipment, $50,000 for buildings and improvements, or aggregate values over $100,000) are recorded as capital assets. The department also tracks software, infrastructure contributions, and donated assets in accordance with policy specifications.

Responsibility for asset integrity is shared: the Finance Department coordinates annual physical inventory and establishes reporting procedures, while individual departments, including Parks and Recreation, maintain day-to-day control of their assigned assets. All items are cataloged in a current, complete inventory, and staff follow established check-in/check-out and audit procedures to ensure accurate tracking and reporting.

Suggested Evidence:
5.5.2a Capital Assets Policy

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