(A) The town will be depreciating capital assets by using either composite/group method depreciation or the straight-line method.
(B) Salvage value will be determined on an asset-by-asset basis. Depreciation will be calculated at year-end. Land is not depreciated according to general accepted accounting principles.
(C) A network of assets is composed of all assets that provide a particular type of service for government. A subsystem of a network of assets is composed of all assets that make a similar portion or segment of a network of assets. The following will be the breakdown of the networks and subsystems.
(1) Roads/streets network.
(a) Subsystems: types of streets; and
(b) Curbs.
(2) Traffic components network.
(a) Subsystems: traffic signals; and
(b) Street lights.
(D) (1) Composite depreciation refers to calculating depreciation for a collection of similar assets. A single composite rate is applied annually to the acquisition cost of the collection as a whole. At year- end, an adjustment will be made to the total cost to account for any additions/disposals throughout the year. The accumulated depreciation associated with it will also be adjusted. A gain or loss will never be reported on the asset when using the composite method. A full year’s depreciation will be taken when the asset is placed in service and no depreciation recorded in the year it is sold or disposed of. The town will group dissimilar assets by useful lives and the town’s similar assets by networks. To determine the appropriate depreciation rate for the composite group, divide one by the number of years the assets are depreciated. For instance, a group of assets with a 25-year life will be depreciated at 4% each year (1/25).
(2) Following is the list of groups, the town will use for depreciation: composite/group depreciation:
(a) Street lights: 35 years;
(b) Traffic signals: 25 years;
(c) Flood walls/gates: 50 years; and
(d) Roads:
1. Cement: ten years;
2. Gravel: 15 years;
3. Concrete: 30 years;
4. Asphaltic concrete: 20 years; and
5. Brick or stone: 50 years.
(E) All assets accounted for under the capital asset policy will be depreciated using the straight-line method of depreciation. A gain or loss on disposal will be recorded.
(1) Following is a list of the most common useful lives:
(a) Vehicles: five years;
(b) Office equipment: five years;
(c) Office furniture: 20 years;
(d) Heavy equipment: ten years;
(e) Fire trucks: 15 years;
(f) Buildings: 50 years;
(g) Building components (HVAC systems, roofing): 20 years;
(h) Leasehold improvements: useful life of asset or lease term (whichever is shorter);
(i) Land improvements, structure (parking lots, athletic courts, swimming pools): 20 years;
(j) Land improvements, ground work (golf course, athletic fields, landscaping, fencing): 20 years;
(k) Outdoor equipment, (playground equipment, radio towers): 15 years;
(l) Grounds equipment, (mowers, tractors, attachments): 15 years;
(m) Computer hardware: three years; and
(n) Computer software: five years.
(2) Town utilities’ useful lives are as follows:
(a) Water:
1. Buildings and improvements: 50 years;
2. Transmission and distribution mains: 50 years;
3. Meters/hydrants: 50 years;
4. Pumping equipment: 50 years;
5. Water treatment equipment: 50 years;
6. Reservoirs/tanks: 50 years;
7. Furniture and equipment: ten years;
8. Other equipment: ten years;
9. Transportation equipment: ten years;
10. Shop and lab equipment: ten years;
11. Computer equipment: three years; and
12. Communications equipment: ten years.
(b) Sewer:
1. Buildings and improvements: 50 years;
2. Sewer lines: 50 years;
3. Combined sewer overflow: 50 years;
4. Lift station: 50 years;
5. Treatment plant/equipment: ten years;
6. Office equipment: five years;
7. Miscellaneous operating equipment: five years; and
8. Vehicles: five years.
(2013 Code, Title II, Ch. 34, § 9) (Ord. I-F-1-a, passed 6-23-2003)