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Shakopee finance director reports preliminary 2024 results show positive year-end variance
Summary
Finance Director presented preliminary, unaudited results through December 2024 showing the city ended the year with a positive general fund variance driven largely by higher-than-expected tax and permit revenues, and a one-time accounting adjustment for accrued compensated absences.
Shakopee’s finance director presented preliminary, unaudited financial results through December 2024 to the City Council on Feb. 18, reporting that the city ended the year with a positive budget variance but that several accounting adjustments remain.
Finance Director Reinhart told the council the city’s preliminary year-end general fund position shows a net positive of roughly $3.5 million, driven primarily by higher-than-budgeted tax receipts and permit revenues. “Preliminary results show that we ended the year positive,” Reinhart said during his presentation.
Reinhart cautioned the numbers are still subject to journal entries, adjustments and the upcoming audit scheduled for April; final reports are typically presented in June. He said the majority of the positive variance came from revenue—about $3.7 million ahead—largely property taxes and permit activity. The city recorded substantial building permit activity in 2024, including 271 single-family homes and multiple commercial permits; Reinhart reported total permit valuation at $322 million for the year compared with $405 million the prior year.
On the expenditure side, Reinhart explained a significant one-time increase in the recorded liability for compensated absences following implementation of a new accounting standard. He said implementation of the new GASB guidance for accrued leave required the city to record a larger liability for leave likely to be used by employees, which increased the general fund compensated-absences liability by roughly $786,000 compared with the budgeted amount. Reinhart characterized that adjustment as likely a one-time effect related to the new standard and pay adjustments in public safety.
Other fiscal details presented to the council: investment interest earnings rose in 2024 (about $2.6 million), and the city recorded an unrealized market value gain of about $1.6 million at year-end due to market movements. Reinhart said the city’s prior practice is to direct excess general fund balances toward one-time capital needs; preliminary estimates suggest $2.0 to $2.6 million could be available for such uses after required reserves and commitments are set aside.
Council members asked clarifying questions about specific revenue and expenditure lines, including fines and forfeitures (court-related pass-throughs to the county) and the potential effect of state-level parental-leave legislation on employer contributions; Reinhart said the city would monitor changes at the Legislature.
No formal council action was required on the report; the finance director said more detailed fund-balance recommendations and any proposed use of one-time funds will be brought back after closing and audit adjustments are complete.
Why it matters: The preliminary results affect budget planning, capital spending and reserve policy. The one-time accounting change for compensated absences affects how some liabilities are shown in 2024 financial statements but, per staff, does not change operational cash positions.
Ending: Reinhart will return with final audited figures and any formal recommendations on fund-balance uses in the city’s regular spring finance reporting cycle.
