Shakopee Derby Days canceled for 2016 amid investigation over finances

A popular summer celebration in Shakopee has been called off for 2016 after police opened an investigation into the finances of the organization that runs Derby Days, city officials said.

The Derby Days board of directors confirmed that the annual party usually held in early August in Huber Park won't go on this year, but they hope to bring the festival back in 2017.

"We are taking time to implement new policies and procedures that include new internal controls," the group said in a posting on Facebook.

Shakopee Police Chief Jeff Tate said an "investigation is taking place" but declined to share details.

Derby Days is run by an independent nonprofit organization called Shakopee Derby Days Inc. The city does not sponsor the event but has helped with setup and provided labor at no cost.

Last summer, personal charges of more than $700 were found on a Derby Days debit card held by then-President Jack McGovern, who said he was pressured to resign after 18 years. McGovern denied making the charges but reimbursed Derby Days for the money in August.

Kyle Larkin, the new board president, said the board has worked with police to identify problems with "previous financial management."

Because of the allegations of financial mismanagement, the city did not guarantee an event permit or labor this year, according to Derby Days organizers.

"The bottom line is the city administrators and the City Council, at this point, are not willing to work with the Derby Days committee," McGovern said.

The volunteer-run event depends on the city's support, so planning had to be put on hold.

Derby Days' revenue has risen steadily over the past few years, according to the group's filings with the IRS. In 2014, the most recent report available, the organization reported $105,982 in revenue but ran a deficit of about $5,000. The group reported about $45,000 in net assets, mostly in cash, savings and investments.

On Monday, the city of Shakopee issued a statement saying officials would not comment until the investigation is complete.

The festival's hiatus means the loss of a fundraising opportunity for local groups, including the Shakopee Jaycees. The organization's Derby Days beer garden collects about $8,000 a year, according to President Dara Wilhelmson.