(A) While substantial repairs and renovations shall be reviewed for potential capitalization, it is anticipated that most will be expensed in the current year. These expenses often merely restore the asset to its original service potential but do not necessarily improve the asset.
(B) Common building expense items include interior and exterior painting, recarpeting, plumbing repairs and replacement, HVAC upgrades, and electrical work. While many of these expenses can be substantial, there is generally no increased building size or efficiency; hence, these costs are expensed in the current year.
(C) An addition to a building provides increased square footage; hence, the capacity is increased and the capital outlay is capitalized.
(D) A roof replacement does not increase building dimensions or efficiency; hence, the cost of replacement should be expensed in the current year.
(E) If buildings are componentized for accounting and financial reporting, the roof replaced is expensed and the new roof is capitalized.
(F) A building remodeling may comprise a reconstruction as will be reflected in the acquisition value of the project; hence this acquisition value will be capitalized.
(G) A building restoration, while costly, may merely restore the building to its original service sufficiency; hence, the restoration cost is expensed in the current year.
(H) A project that improves a building with new windows of substantial acquisition value providing for future energy cost reduction is capitalized because of increased efficiency.
(I) Newly constructed or reconstructed roads are capitalized.
(J) Widening a road with additional lanes increases the amount of traffic flow and; hence, the capital outlay is capitalized.
(K) Resurfacing a road, while costly, does not increase traffic volume or efficiency; hence, the cost is expensed in the current year.
(L) Bridge joint repair and bridge deck resurfacing do not increase proportions or efficiency; hence, repairs are to be expensed in the current year.
(M) A newly constructed bridge or a bridge reconstruction are capitalized.
(N) Improvements to land include paved parking areas, fences, outdoor lighting, playground equipment, water fountains, retaining walls, paths, walkways, sheds, and other small structures.
(O) Vehicles include passenger autos, trucks (light, medium, heavy), sport utility vehicles, railroad vehicles, tractors, bulldozers, buses, forklift trucks, off-road vehicles, motorcycles, watercraft, and the like.
(P) Concerning vehicles and equipment, to replace a truck transmission is a significant repair and expense; however, the truck is merely restored to good working order and is not improved so the expenditure is expensed.
(Q) To rebuild a police squad car following a collision may be a significant expenditure but is not capitalized in that the vehicle is merely restored to good working order and the expenditure is expensed.
(R) A vehicle frame-off restoration or similar restoration may exceed the original acquisition value of the vehicle; hence, this expenditure is capitalized.
(S) General infrastructure includes roads, rights-of-way, bridges, tunnels, drainage systems, dams, streetlights, traffic signals, sidewalks, and improved alleys.
(T) Water and sewer systems include treatment facilities, pump stations, lift stations, water distribution piping, sanitary sewer collection piping, and all assets used in the provision of water and the treatment of waste.
(Ord. 21-0055, passed 8-11-2021; Ord. 22-0027, passed 5-11-2022)