(A) Definition of subsystems and networks.
(1) New infrastructure reporting rules are mandated under GASB 34 implementation. The new standard requires the reporting of all major infrastructure assets. The reporting of non-major infrastructure assets is encouraged but not required. The town will classify major infrastructure assets at the network and subsystem levels.
(2) At the subsystem level, the asset will be classified as major if the cost of the subsystem is at least 5% of the cost of all capital assets reported in fiscal years beginning after May 20, 2019. A SUBSYSTEM will be defined as a segment of a network of assets that serve a similar function (such as paved roads, gravel roads and unimproved roads).
(3) At the network level, the asset will be classified as major if the cost of the network is at least 10% of the cost of all capital assets reported in fiscal years beginning after May 20, 2019. A NETWORK will be defined as a group of similar assets that serve a particular function or purpose of the town.
(4) All major infrastructure assets are to be reported on a prospective basis effective May 20, 2019. This will include the cost of the asset.
(5) All infrastructure assets that are to be reported will be determined at the network and subsystem level, regardless of the method of reporting.
(B) Method of obtaining cost.
(1) All infrastructure assets are to be reported at cost. Cost may include all costs necessary to make the asset fully operational. These costs may include:
(a) Legal and title fees, closing costs;
(b) Appraisal and negotiation fees, surveying fees;
(c) Damage payments;
(d) Land preparation costs, demolition costs;
(e) Architect, engineering and accounting fees;
(f) Insurance premiums during construction;
(g) Transportation charges.
(2) All infrastructure exceeding $50,000 will be tracked and inventoried. The proposed capitalization point will be $250,000, in accordance with the classification of a major infrastructure asset.
(C) Record keeping requirements.
(1) It will be the responsibility of all department heads to maintain accurate records of capital assets within their respective departments. The Town Clerk-Treasurer will be responsible for recording these values in the town’s annual report in compliance with standards established by the state.
(2) The physical inventory of all capitalized and tracked assets will serve as a policing tool against theft or destruction of the town’s property. In situations where assets are missing, a search will be conducted to find the cause. If an individual or group of individuals is determined to be the cause, disciplinary measures will be taken.
(3) These new reporting requirements are mandated by the Governmental Accounting Standards Board and are intended to enhance financial and operational accountability to the citizens of the town and all concerned constituents.
(Ord. 2019-2, passed 5-20-2019)