(a) Established. The Council and management of the City desire to establish and maintain a capital asset system.
(b) Definition. A “capital asset” is defined as a financial resource meeting all of the following criteria:
(1) It is tangible in nature;
(2) It has a useful life of at least five years;
(3) It is not a repair part or supply item; and
(4) It has a value or cost greater than five thousand dollars ($5,000).
These criteria shall apply to individual assets and not groups of assets.
(c) Classification.
(1) Categories. Items meeting the capital asset criteria are classified by major categories as follows:
A. Land and improvements;
B. Buildings and building improvements;
C. Infrastructure;
D. Machinery and equipment; and
E. Vehicles.
(2) Governmental activities.
A. Capital assets reflected in governmental activities are stated at historical cost (or estimated historical cost) and are updated for the cost of additions and retirements during the year. Depreciation has been provided on a straight-line basis over the following estimated useful lives:
Description | Estimated Lives |
Buildings | 50 years |
Infrastructure | 30 to 65 years |
Machinery and equipment | 5 to 30 years |
Vehicles | 5 to 8 years |
B. The costs of normal maintenance and repairs that do not add to the value of the assets or materially extend asset lives are not capitalized. Improvements that extend the useful life or increase the capacity or operating efficiency of the asset are capitalized at cost.
C. The City will capitalize interest incurred during the construction of capital assets.
(3) Business-type activities.
A. Capital assets reflected in business-type activities are stated at historical cost (or estimated historical cost) and are updated for the cost of additions and retirements during the year. Depreciation has been provided on a straight-line basis over the following estimated useful lives:
Description | Estimated Lives |
Buildings | 50 years |
Infrastructure | 30 to 65 years |
Machinery and equipment | 5 to 30 years |
Vehicles | 5 to 8 years |
B. The City will capitalize interest incurred during the construction of capital assets.
(4) Valuation. The City's capital asset values will be determined using original acquisition costs when such information is available. In cases when original costs are not practically determinable, estimates will be used by indexing estimated current costs back to the estimated year of acquisition. Donated capital assets will be capitalized at estimated fair market value on the date donated.
(5) Disposal. Capital assets determined to be obsolete or damaged beyond reasonable repair shall be disposed of in accordance with the City's capital asset procedure manual.
(Res. 01-48. Passed 3-7-01; Ord. 08-47. Passed 5-7-08.)