This policy is intended to define fixed, capital and non-capital assets, and to provide guidance in their custody and accounting.
   (A)   Definitions. For the purpose of this section, the following definitions shall apply unless the context clearly indicates or requires a different meaning.
      FIXED ASSETS. Assets the lives of which extend beyond a single fiscal year. FIXED ASSETS may be either intangible (such as easements, water rights or contracts with a monetary value), or tangible (such as land and improvements, buildings and improvements, vehicles, equipment, machinery, furniture and fixtures, and infrastructure assets such as roads, bridges, sanitary and storm sewers and traffic signals, whether hosed in governmental or proprietary funds).
         (a)   FIXED ASSETS subject to this section may be acquired in any of the following ways:
            (1)   Purchased;
            (2)   Lease purchase/capital lease;
            (3)   Matured lien;
            (4)   Construction;
            (5)   Addition to an existing asset;
            (6)   Condemnation;
            (7)   Donation/contribution;
            (8)   Interfund transfer;
            (9)   Trade or barter;
            (10)   Annexation.
         (b)   FIXED ASSETS are divided into 2 broad classes:
            (1)   Governmental fund capital assets. FIXED ASSETS owned by 1 of the town’s governmental funds, and meeting both cost and useful life criteria, as outlined below, are to be both capitalized and reported in the town’s annual financial statements at historical cost.
            (2)   Non-capital assets. FIXED ASSETS not meeting the cost and useful life criteria described in division (C)(1). Such assets are to be neither capitalized, depreciated nor reported in the town’s annual financial statements but are to be expensed in the year purchased and annually inventoried to assure their proper safekeeping and use.
         (c)   Separate records will be maintained in each of the town’s funds for each of the above 2 asset classes.
      USEFUL LIFE. The period over which a capital asset will serve its intended purpose.
   (B)   Acquisition documentation.
      (1)   The acquisition of all assets (not just capital assets) will be recorded and at least annually reported to the Clerk-Treasurer using the capital assets ledger prescribed by the SBoA, or some other acceptable form, to ensure that acquired assets are properly reflected in town records.
      (2)   A separate ledger will be maintained within each town fund and submitted for each asset class.
      (3)   Acquisition information reported to the Clerk-Treasurer will include, at minimum, the following:
         (a)   A description of the item (all asset classes);
         (b)   The item’s asset category (all asset classes);
         (c)   The item’s serial tag or other identifying number (all asset classes);
         (d)   The department acquiring the asset (all asset classes);
         (d)   Acquisition date (all asset classes);
         (e)   The item’s original cost, including the reasonable and necessary cost of acquiring and placing it in service, as described in division (C)(4) (capital assets only).
   (C)   Capitalization.
      (1)   Assets meeting both of the following criteria are to be capitalized.
         (a)   Cost. Assets with an original cost or fair market value (if acquired other than by purchase) of $5,000 or more;
         (b)   Useful life. Assets with useful lives in excess of 2 years.
      (2)   Exceptions.
         (a)   Items permanently installed/attached to a larger unit either at or subsequent to the time of construction/acquisition, unlikely to be used elsewhere and not meeting the cost criteria described in division (C)(1)(a) are to be included in the cost of the larger unit.
         (b)   The reporting of assets acquired with grant funds and/or by a department subject to more restrictive reporting requirements than those contained in this section must comply with the more restrictive of the above criteria or pertinent requirements.
         (c)   Planned maintenance functions that neither prolong a capital asset’s life nor increase its functionality, but merely maintain its intended functionality (such as repaving a street) are not to be capitalized, regardless of cost.
         (d)   Functions that either prolong the life of an asset or increase its functionality are to be capitalized, regardless of cost.
      (3)   Capitalization thresholds.
         (a)   General fixed assets. With the exception of land (all of which is to be capitalized) the following assets will be capitalized if their value is $5,000 or more.
            1.   Animals;
            2.   Buildings;
            3.   Furniture and fixtures;
            4.   Heavy equipment;
            5.   Improvements other than buildings;
            6.   Office and other equipment;
            7.   Outdoor equipment;
            8.   Vehicles.
         (b)   Infrastructure assets. All infrastructure assets will be capitalized.
      (4)   Other costs. In addition to price, the reasonable and necessary costs of acquiring and placing capital assets in service are to be capitalized. This may include, but not be limited to the following:
         (a)   Title and documentation fees;
         (b)   Capitalized interest;
         (c)   Site preparation costs;
         (d)   Fees for related professional services;
         (e)   Transportation charges.
   (D)   Depreciation.
      (1)   Capital assets, except land and nonstructural improvements, will be depreciated over their useful life using the straight-line method.
      (2)   Except where a lease or other contractual agreement contains provisions for salvage or trade in value, no salvage value will be assumed.
      (3)   Depreciation will be calculated annually with a full year’s depreciation allocated to an asset starting January 1 the year following its being put in service.
      (4)   Each group of capital assets will be assumed to have the following useful life:
         (a)   Ambulances: 12 years;
         (b)   Animals: 5 years;
         (c)   Bridges: 50 years;
         (d)   Buildings: 50 years;
         (e)   Catch basins, inlets, lift stations, manholes, and sewer pipes: 50 years;
         (f)   Communication equipment: 10 years;
         (g)   Computer equipment: 5 years;
         (h)   Curbing, gutters and sidewalks: 15 years;
         (i)   Fire and large trucks: 15 years;
         (j)   Fire fighting equipment (ladders, hoses): 12 years;
         (k)   Furniture and fixtures: 15 years;
         (l)   Grounds equipment (mowers, tractors): 10 years;
         (m)   Heavy equipment: 12 years;
         (n)   Improvements other than buildings: 20 years;
         (o)   Land improvements - structure (parking lots, athletic courts, picnic shelters): 20 years;
         (p)   Office, computer and other equipment: 5 years;
         (q)   Outdoor equipment (playground equipment, radio towers): 15 years;
         (r)   Roadways paved (asphalt): 40 years;
         (s)   Roadways non-paved: 50 years;
         (t)   Street lights: 30 years;
         (u)   Traffic signals and signs: 20 years;
         (v)   Vehicles other than ambulances, fire and large trucks: 6 years.
   (E)   Inventory and disposition.
      (1)   All capital assets will be physically inventoried annually at the department level by department heads and/or their designees. The Clerk-Treasurer will conduct random inventory checks to ensure ongoing compliance with this and other applicable town policies.
      (2)   The disposition of all assets (not just capital assets) will be recorded and at least annually reported to the Clerk-Treasurer using the capital assets ledgers described in divisions (B)(1) and (2).
      (3)   Disposition information reported to the Clerk-Treasurer will include, at minimum, the following:
         (a)   A description of the item;
         (b)   The item’s asset category;
         (c)   The item’s serial, tag or other number;
         (d)   The department disposing of the asset;
         (e)   Disposition;
         (f)   Disposal date;
         (g)   Any monetary value received for the asset at disposition.
(Ord. 2019-07, passed 9-17-2019)