(A) Land.
(1) The town will capitalize all land purchases, regardless of cost. Exceptions to land capitalization are land purchased outright, as easements, or rights-of-way for infrastructure. Examples of infrastructures are roads and streets, street lighting systems, bridges, overpasses, sidewalks, curbs, parking meters, street signs, viaducts, wharfs, and stormwater collection.
(2) Original cost of land will include the full value given to the seller, including relocation, legal services incidental to the purchase (including title work and opinion), appraisal and negotiation fees, surveying, and costs for preparing the land for its intended purpose (including contractors and/or town workers (salary and benefits)), such as demolishing buildings, excavating, clean up, and/or inspection.
(3) A department will record donated land at fair market value on the date of transfer plus any associated costs.
(4) Purchases made using federal or state funding will follow the source funding policies and above procedures.
(B) Machinery and equipment.
(1) The town will capitalize and tag items with an individual value equal to, or greater than, $1,000. Machinery combined with other machinery to form one unit with a total value greater than the above mentioned limit will be one unit.
(2) Shipping charges, consultant fees, and any other cost directly associated with the purchase, delivery, or set up (including contractors and/or town works (salary and benefits)), which makes such equipment operable for its intended purpose will be capitalized.
(3) Improvements or renovations to existing machinery and equipment will be capitalized only if the result of the change meets all of the following conditions:
(a) Total costs exceeds $1,000;
(b) The useful life is extended two or more years; and
(c) The total costs will be greater than the current book value and less than the fair market value.
(4) Examples include:
(a) A work truck being equipped with screens, lights, or radios for use as a single unit throughout its life expectancy is considered one unit;
(b) If police cars are constantly changing light bars or radios to other vehicles, the town will capitalize each piece of equipment separately if it meets the required dollar amount; and
(c) A department’s computer (CPU, monitor, keyboard, and printer) is considered one unit.
(5) A department will record donated machinery and equipment at fair market value on the date of transfer with any associated costs.
(6) Purchases made using federal or state funding will follow the source funding policies and above procedures.
(C) Buildings. A department will capitalize buildings at full cost with no subcategories for tracking the cost of attachments. Examples of attachments are roofs, heating, cooling, plumbing, lighting, sprinkler systems, or any part of the basic building. The department will include the cost of items designed or purchased exclusively for the building.
(1) A department’s new building will be capitalized only if it meets the following conditions:
(a) The total cost exceeds $5,000; and
(b) The useful life is greater than two years.
(2) A department improving or renovating an existing building will capitalize the cost only if the result meets all of the following conditions:
(a) The total cost exceeds $5,000;
(b) The useful life is extended two or more years; and
(c) The total cost will be greater than the current book value and less than the fair market value.
(3) Capital building costs will include preparation of land for the building, architectural and engineering fees, bond issuance fees, interest cost (while under construction), accounting costs if material, and any costs directly attributable to the construction of a building.
(4) A department will record donated buildings at fair market value on the date of transfer with any associated costs.
(5) Purchases made using federal or state funding will follow the source funding policies and above procedures.
(D) Improvements other than buildings. Improvements to land for better enjoyment, attached or not easily removed, and will have a life expectancy of greater than two years. Examples are walks, parking areas and drives, golf cart paths, fencing, retaining walls, pools, outside fountains, planter underground sprinkler systems, and other similar items.
(1) Improvements do not include roads, streets, or assets that are of value only to the public. For example, Main Street is a public street with greatest value to the public. Roads or drives upon town-owned land that provide support to our facilities are assets. A sidewalk down the road for public enjoyment is an infrastructure improvement and is not capitalized. However, sidewalks installed upon town-owned land for use by the public and for the support of the facility are capital assets.
(2) The town will capitalize new improvements other than buildings only if it meets the following conditions:
(a) The total cost exceeds $35,000; and
(b) The useful life is greater than two years.
(3) A department will capitalize improvements or renovations to existing improvements other than buildings only if the result meets the following conditions:
(a) The total exceeds $55,000;
(b) The asset’s useful life is extended two or more years; and
(c) The total cost will be greater than the current book value and less than the fair market value.
(4) A department’s donated improvements, other than buildings, will be recorded at fair market value on the date of transfer with any associated costs.
(5) Purchases made using federal or state funding will follow the source funding policies and above procedures.
(Ord. 1999-3, passed 5-18-1999)