(A) Classification of assets. Capital assets are personal and real property used in the operations of the government that have an expected estimated useful life beyond a single period. Capital assets are to include any item that falls into one of the following categories:
(1) Land;
(2) Infrastructure;
(3) Buildings;
(4) Improvements other than buildings;
(5) Machinery, equipment and vehicles;
(6) Books and other; and
(7) Construction in progress.
(B) Capitalization thresholds.
(1) To be considered a capital asset for financial reporting records, an item must be at or above the capitalization threshold and have a unit historical cost of $5,000 or more. Assets will remain part of the property record until they are retired or are disposed of, sold, traded in, etc. regardless of net book value amount.
(2) The capitalization threshold for the following classes of assets shall be:
(a) Land: N/A
(b) Land improvements: $5,000
(c) Buildings: $5,000
(d) Machinery and equipment: $5,000
(e) Vehicles: $5,000
(f) General infrastructure: $5,000
(g) Construction in progress: N/A
(3) With regard to improvements to buildings and general infrastructure, a capital outlay must be significant and increase capacity, increase efficiency, or extend the asset’s estimated useful life beyond the original expectation.
(4) Capital assets with a historical cost of less than $5,000 may be included in capital asset tracking with consultation of the Department Head or Clerk-Treasurer. However, no assets will be tracked with a value of less than $500.
(C) Historical cost or estimated historical costs.
(1) Capital assets are recorded at historical cost which includes any ancillary charges necessary to place the asset into its intended location and condition for use.
(2) Ancillary charges include, for example, freight and transportation charges, site preparation costs, and professional fees. Engineering costs (internal and external) include related preliminary project and environmental studies; project estimating, design, and planning (drawings and specifications); and construction engineering, construction management, construction inspection and project payment. Donated capital assets are recorded at their estimated fair market value at the time of acquisition.
(D) Responsibility for property record maintenance.
(1) The Clerk-Treasurer will ensure that reporting for capital assets is being exercised by establishing a Master Capital Asset Inventory, both initially and periodically in subsequent years.
(2) The Supervisor of Public Works, Utilities Superintendent, Director of Parks and Recreation, Police Chief, Fire Chief and City Manager shall review the inventory list of all city capital assets annually by December 31 of each year.
(3) The Clerk-Treasurer will ensure that reporting for capital assets is being exercised by establishing a Master Capital Asset Inventory, both initially and periodically in subsequent years. The Clerk-Treasurer will further ensure that the capital assets report will be updated no less than annually to reflect all improvements, additions, retirements, and transfers to reflect the new, annual capital asset balance for financial reporting purposes and said deadlines.
(Ord. 2020-011, passed 12-14-20)